2015...ALNO brand world / location map in € 000 2015 2014 2013 2012 2011 Consolidated income...

2015 Annual Report

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in € 000 2015 2014 2013 2012 2011

Consolidated income statement

Sales revenue 521,505 545,774 395,056 446,258 452,810

Total operating performance 576,420 624,584 407,111 456,452 459,962

EBITDA 14,771 39,957 6,748 13,959 5,204

EBIT −11,461 6,247 2,421 877 −10,698

EBT −24,433 −6,308 −5,995 −1,217 −25,216

Consolidated net profit or loss −4,386 −4,121 −9,472 −1,420 −25,561

Profit per share (diluted and undiluted) in EUR −0.06 −0.06 −0.14 −0.05 −1.04

Consolidated statement of financial position

Non-current assets 180,156 173,363 99,830 89,213 86,455

Investments in property, plant and equipment 13,532 15,516 13,556 12,997 16,660

Liquid funds 4,844 2,270 3,266 5,402 2,243

Equity −30,627 −28,007 −18,381 −8,708 −73,344

Subscribed capital 75,595 70,095 70,095 70,095 67,847

Balance sheet total 290,131 284,546 181,469 168,252 159,670

Consolidated cash flow statement

Cash flow from operating activities −28,524 15,156 −29,522 25,471 −3,261

Cash flow from investment activities 21,521 −52,746 −13,677 −14,737 −17,138

Cash flow from financing activities 9,766 36,586 41,634 −7,052 20,051

Cash change in cash and cash equivalents 2,763 −1,004 −1,565 3,682 −348

Employees

Employees as at 31 December 2,099 2,289 1,875 1,926 1,845

Yearly average number of employees 2,199 2,301 1,897 1,856 1,806

Personnel expenses 136,429 138,253 95,263 97,204 98,529

Yearly average personnel costs per employee 62 60 50 52 55

Yearly average sales volume per employee 237 237 208 240 251

GROUP KEY FIGURESof ALNO Aktiengesellschaft, Pfullendorf, as at 31 December 2015

COMPANY PROFILE

ALNO AG is one of Germany’s leading kitchen manufacturers, with a staff of around 2,100 employees. From its four national and international sites, the corporation provides a full range of kitchens to worldwide markets. In addition to the core ALNO brand, the ALNO Group also owns the WELLMANN, PINO as well as PIATTI and ALNOINOX brands. Therefore all segments from low-price to premium price can be offered. The business area encompasses development, production and sale of kitchen furniture as well as on selling electrical appliances and accessories.

The company was founded in 1927 by Albert Nothdurft in Wangen near Göppingen. The production facility was moved to Pfullendorf in 1958. This was followed by fast-paced development of the company – in parallel to the economic growth enjoyed in Germany and Europe. In 1995, the former ALNO Möbelwerke GmbH & Co. KG was converted into a corporation. In August 2003, ALNO AG merged with the Casawell Service Group, repre-senting an important step on the way to becoming the largest kitchen manufacturer in the world. In the first quarter of 2014, a deal was concluded to take over AFP Küchen AG, which is the market leader in Switzerland with its PIATTI and FORSTER Schweizer Stahl-küchen (ALNOINOX) brands.

Not only does ALNO AG represent tradition and quality, the company also works continu-ously on further development of its brands in terms of design, innovation and modernity. Surveys reveal that ALNO is the best known and most popular kitchen brand in Germany.

THE ALNO BRAND WORLDThe ALNO Group combines six high-profile, independent brands under one roof. Each individual brand successfully appeals to very different customers. For us, it is important always to offer innovative prod-ucts to customers and consumers through different sales channels and in various price segments. The awards we have won in this process give us the motivation for continuous improvements.

WELLMANN is characterised by variety, modern design and planning flexibility. The focus is on elegant, classically modern and individual style. With the new kitchen genera-tion, WELLMANN serves trend-oriented consumers in the medium-to-upper price segment.

WELLMANN kitchen world

ALNO stands equally for 88 years of tradition and innova-tion. ALNO is also the premium brand in the Group. It com-bines maximum quality with award-winning design. ALNO bespoke kitchens offer customers an enormous variety of design options with top-class service.

ALNO kitchen world

PINO is the entry-level brand with its compact all-inclusive kitchens. The assortment is characterised by fresh, modern and uncomplicated design. The focus is directed towards the RTA and self-service area, and the brand serves the lower price segment.

PINO kitchen world

ALNOINOX is the leading steel kitchen brand in Europe for the domestic customer market, and has won several design prizes with its unique, streamlined and yet elegant design. The exclusive stainless steel kitchens have been developed and manufactured in Switzerland since 1874, and are re-garded as classics.

ALNOINOX kitchen world

PIATTI is the market leader in Switzerland, and has embod-ied Swiss kitchen design since 1948. PIATTI stands out through innovative kitchen concepts in each price segment, and is known for excellent quality, individual planning exper-tise and flexibility. With an extensive assortment, PIATTI makes almost every kitchen dream come true.

PIATTI kitchen world

THE ALNO SITES

ALNO AG headquarters Brand branch Cities

PFULLENDORF

FRANKFURT ON THE MAIN

ENGER

BERLIN

COSWIG

HAMBURG

MUNICH

BERN

ARBON

04 COMPANY

20 CORPORATE SOCIAL RESPONSIBILITY

28 GROUP MANAGEMENT REPORT

72 CONSOLIDATED FINANCIAL STATEMENTS

82 NOTES

161 AUDITOR’S REPORT

162 DECLARATION BY THE STATUTORY REPRESENTATIVES OF ALNO AG

163 FINANCIAL CALENDAR AND PUBLICATION DATA

CONTENTS

„ ALNO HAT DEUTLICH MEHR HANDLUNGSSPIEL-RAUM ALS FRÜHER. DEN WOLLEN WIR NUTZEN, UM NACHHALTIG PROFITABEL ZU WERDEN.“Max Müller, Vorstandsvorsitzender der ALNO AG

LETTER FROM THE CHIEF EXECUTIVE OFFICER

2015 was a year of many successful steps. We are well on course to fi nally placing ALNO AG on a lasting, fi rm footing. Those steps are not yet complete and some of the successes have yet to be refl ected in the fi gures, but ALNO AG is well on the way to being a healthy company once more. The restructuring programme decided on in February 2015 set out the sequence of the steps to be taken. Its objectives were threefold:

Greater production flexibility Centralisation of administrative functions Optimisation of the brand portfolio.

ALNO succeeded in making customer service and production more fl exible at all its German plants in 2015. One major milestone was the integration of production at Piatti Dietikon into the Pfullendorf plant which, after a few teething problems, was completed at the end of December 2015 and is now running at full capacity, further strengthening the Pfullendorf site. By optimising production in Pfullendorf, in 2016 we will be able to reduce the costs of extra shifts and contract workers signifi cantly.

At the end of 2015 we implemented all the measures needed to complete the centrali-sation of all administrative areas. To this end, the processes and systems were standard-ised throughout the Group and personnel were combined. In the end, we have saved 100 jobs and, with non-recurring one-time restructuring expenses of three million euros, a mean single-digit amount in million euros each year.

The early impact of this is already apparent in these fi nancial statements. However, these measures will not take full effect until 2016.

The third element of the strategy was the sale – completed in June 2015 – of our com-pany Impuls Küchen GmbH to Steinhoff Möbel Holding GmbH. As well as the sale, we concluded long-term contracts with the buyer which secure our delivery capability at

our foreign subsidiaries, particularly in the project business, while also assuring us of signifi cant economies of scale. By selling Impuls Küchen GmbH, we have gained the fi nancial leeway necessary to fi nance the restructuring. Furthermore, the sale of Impuls has enabled us to optimise the remaining brand portfolio, reduce the complexity of the ALNO Group and position our brands more distinctively. ALNO is our brand for sophis-ticated customer requirements. Wellmann now serves the OEM business without any overlaps, as well as demand in the mid-price segment, and PINO is our entry-level brand. With the sale of Impuls, we have also revealed the undisclosed reserves that exist within the ALNO Group.

Thus far, this intrinsic value is not adequately refl ected in the valuation of our shares and bonds. The reasons for this are clear. We still have not completed the long road to recovery. ALNO was in jeopardy in 2011. Since then, we have gradually stabilised the company.

Coming from a diffi cult market environment in 2011 and despite tight fi nancial constraints, in the last few years we have continuously improved our business development. In the process, ALNO AG has gained new room for manoeuvre which we were fi nally able to exploit in 2014 with the purchase of Swiss company AFP-Küchen AG and the ensuing

Max Müller, Chief Executive Offi cer of ALNO AG

„ ALNO HAT DEUTLICH MEHR HANDLUNGSSPIEL-RAUM ALS FRÜHER. DEN WOLLEN WIR NUTZEN, UM NACHHALTIG PROFITABEL ZU WERDEN.“Max Müller, Vorstandsvorsitzender der ALNO AG

transfer of production to Pfullendorf in 2015. The new processes then became estab-lished in 2015. The fruits of this transfer will be fully apparent for the fi rst time in 2016.

In parallel to this, we have continuously internationalised ALNO. At 56 percent of consoli-dated sales, the majority of our sales are now generated abroad; in 2014 that fi gure was 52%; and in 2011 a mere 28 percent. Our sales abroad are generally more profi table, not least because we have direct control over our distribution abroad and have established our own distribution structures in some places. We will consistently pursue this path. At the end of 2015, our joint venture in Russia became operational, with the takeover of the existing production at 1st Furniture Factory “1mf”. 2016 will be the fi rst full fi nancial year in Russia. In October 2015 we acquired a majority stake in Swedish company Küchen Nordic AB.

The international distribution aspect also plays an important role at our two new share-holders, Nature Holding and Shun Hing. With around 3,500 employees, Nature Holding manufactures fl oor coverings, wardrobes and kitchen cupboards and distributes these to more than 4,000 stores throughout China. Nature has since established 25 Wellmann exclusive shops in China and is also engaged in the project business with Wellmann. Shun Hing is an industrial group with around 1,800 employees which has been distribut-ing products of the ALNO Group on an exclusive basis in Hong Kong and Macau since 2013. The biggest business segment of the Shun Hing Group is the exclusive representa-tion of the entire Panasonic range in Hong Kong, which we believe presents further opportunities to expand our business in Asia. By acquiring shares and a convertible bond, both partners reinforced their commitment to ALNO in March and November 2015.

We can be satisfi ed with the progression of sales. Consolidated sales total € 522.0 million in 2015. Although this is four percent lower than the previous year, Impuls was decon-solidated midway through the year. Calculated on a comparable basis, ALNO grew by four percent in 2015 compared with 2014. Demand for our products is strong and our sales strategy is proving its worth. The new Chief Sales Offi cer is responsible for this. With Mr Andreas Sandmann (Chief Sales Offi cer) and, since the start of 2016, Mr Frank Wiedenmaier (Chief Operating Offi cer), we have a more youthful and stronger manage-ment team. In terms of its leadership, our Group is now in great shape for the future. We began the process of restructuring the plants and making them more fl exible back in the second half of 2015. A quick look at our profi tability shows how successful this strategy has been. The cost of materials ratio has fallen to 56.0% (previous year: 57.9%). Personnel expenses will fall with a time-lag by € 7.0 million per year. Although the ALNO Group’s results are ultimately negative in 2015, the successes of the restructuring are already apparent in the marked improvement in EBITDA. Compared with 2014, EBITDA has massively improved by € 27.8 million to € −0.4 million in 2015.

“ ALNO KITCHENS REPRESENT THE TRUE CENTRE IN THE OWN FOUR WALLS.”

Nonetheless, losses are painful. Since I took up my position, the entire management has been working incredibly hard to return ALNO permanently to profi tably territory. Now, that goal is within sight. 2016 got off to an encouraging start; order intake is sig-nifi cantly up on last year and, if that trend continues, a marked increase in sales is in prospect. Adjusted for Impuls and special items, we are budgeting with a signifi cant increase in EBITDA.

For all its symbolic signifi cance, however, this is merely one stage for us on the road to becoming a sustainably profi table company. Please accompany us along that road. We intend to further strengthen our capital base. We want to regain full scope for action, in order to seize the opportunities that present themselves courageously and for the good of the company, its shareholders, employees and customers.

Pfullendorf, 31 March 2016

Max MüllerChief Executive Offi cer of ALNO AG

“ ALNO HAS SIGNIFICANTLY MORE SCOPE OF ACTION THAN IN THE PAST. WE WILL USE THIS TO BECOME SUSTAINABLE PROFITABLE.”Max Müller, Chief Executive Officer of ALNO AG

THE BOARD OF MANAGEMENT

Max Müller, Chief Executive Officer (CEO)

Max MüllerChief Executive Officer (CEO)Appointed on 6 April 2011

Max Müller was formerly sales and marketing manager of a company in the clockmaking in-dustry, as well as managing director of a medium-sized company group specialising in busi-ness with Eastern Europe and the USSR. As founder of various enterprises and member of several corporations in a whole variety of sectors, Max Müller can draw on considerable business experience. In addition to his position as Chief Executive Officer of ALNO AG, he has been President of the Administrative Council of two Swiss investment companies, Comco Holding AG and Starlet Investment AG, since 1993. Before then, Max Müller was CEO of the Comco Group and Chairman of the Board of Adler Bekleidungswerke AG & Co. KG. Both companies belonged to ASKO / Metro AG. Within the space of two years, he restored the ailing Adler Bekleidungs werke AG & Co. KG to the black and made it one of the most profi table mainstays of the ASKO Group. At ALNO AG, Max Müller is responsible for the areas of audit-ing, legal, restructuring / acquisitions, corporate communication as well as the international activities of the ALNO Group.

ALNO AG Annual Report 20156

COMPANY GROUP MANAGEMENT REPORT CONSOLIDATED ANNUAL FINANCIAL STATEMENTS NOTES

The Board of Management

Ipek Demirtas, Chief Financial Officer (CFO)

Ipek DemirtasChief Financial Officer (CFO)Appointed on 13 July 2011

After graduating in business administration, Ipek Demirtas first worked for the STINNES Group, then spent over ten years at PricewaterhouseCoopers and seven years as managing director of Petroplus Mineralölprodukte Deutschland GmbH and Marimpex Mineralöl-Handels-gesellschaft mbH. She subsequently became Chief Financial Officer of Environmental Solutions Europe Holding B. V. (OTTO Group), Maastricht, and managing director of several subsidiar-ies of the OTTO Group, where she was able to restructure strategic fields of business with great success. Ipek Demirtas joined ALNO AG in January 2010 as manager of Group finance. Since July 2011, Ipek Demirtas has been Chief Financial Officer responsible for finance / accounting, controlling, human resources / orga nisation, IT as well as capital markets / special projects and in vestor relations.

7

REPORT OF THE SUPERVISORY BOARD

During the 2015 year under review, the Supervisory Board of ALNO Aktiengesellschaft (ALNO AG) carefully undertook the tasks and duties required of it according to the law, articles of association and internal governance procedures. Within this context, it dealt in detail with the position of the company, continuously monitoring and advising the Board of Management.

The Board of Management kept the Supervisory Board informed on a regular, prompt and extensive basis about all aspects of fundamental importance to the Group, in the form of written and verbal reports. In particular, discussions were held regarding corporate planning, ongoing business development, company strategy, liquidity forecasts, capital and financing measures, the risk position, risk management as well as important Group projects. If the course of business deviated from planning, such situations were indicated by the Board of Management in detail and explained. The Board of Management coordinated the strategic alignment of the company with the Supervisory Board and reported at regular intervals about the status of implementation of the strategy. The Supervisory Board was involved in decisions at an early stage.

Major Group projects, such as the sale of Impuls Küchen GmbH, the setting up of a joint venture in Russia and the restructuring of ALNO AG presented particular challenges to the Supervisory Board in its monitoring role in 2015.

Even between Supervisory Board meetings, the Chairman of the Supervisory Board ensured that he was kept regularly informed by the Board of Management regarding current develop-ments in the business position, strategy, risk position, risk management, planning and compli-ance by the company and the status of significant projects. The Chairman of the Supervisory Board was immediately informed by the Board of Management of important events that are of major significance when assessing the company’s situation and development and for its management. The Chairman of the Supervisory Board then informed the Supervisory Board and – where necessary – convened an extraordinary meeting of the Supervisory Board.

All business transactions requiring approval by the Supervisory Board according to the law, articles of association or internal governance procedures were examined and decided by the Supervisory Board. Furthermore, important individual business transactions were mentioned. In addition, in the 2015 financial year, the Supervisory Board or the Chairman of the Super-visory Board submitted enquiries to the Board of Management and the auditor, and also conducted various discussions and meetings, regarding any risks to the net assets, financial position and results of operations of the individual companies in the ALNO Group, and received explanations about the measures taken. In addition, second tier management was also involved in specific topics.

The cooperation between the Supervisory Board and the Board of Management was char-acterised by an intensive and open exchange.

8 ALNO AG Annual Report 2015

Meetings of the Supervisory Board

The Supervisory Board held eleven meetings in the financial year 2015. Seven of these were a face-to-face meetings and four took the form of teleconferences. All members of the Supervisory Board were able to take part in more than half of the meetings.

There were no conflicts of interest needing to be disclosed to the Supervisory Board or the handling of which must be notified to the annual general meeting.

Main aspects of deliberations in the full Supervisory Board meeting

Regular deliberations were conducted on the Supervisory Board regarding the market situa-tion and development, examination and monitoring of profit and loss accounts, balance sheets, net assets, financial and liquidity position of the company, the strategic orientation of the Group as well as major company projects.

At the Supervisory Board meeting on 29 January 2015, the Board of Management presented the ALNO Group’s reorientation as part of the planned restructuring project. The Super-visory Board was also informed about the status of medium-term planning for 2016 to 2018 and about the strategic sales activities planned for 2015.

Hanns R. Rech, Chairman of the Supervisory Board

9COMPANY GROUP MANAGEMENT REPORT CONSOLIDATED ANNUAL FINANCIAL STATEMENTS NOTES

Report of the Supervisory Board

On 31 March 2015, the Supervisory Board held a teleconference and passed resolutions. Mainly, the Supervisory Board discussed the annual financial statements of ALNO AG as at 31 December 2014 as well as the consolidated financial statements of the ALNO Group as at 31 December 2014 together with the auditors from PricewaterhouseCoopers AG Wirtschafts-prüfungsgesellschaft, Stuttgart, and discussed these statements in detail. All the documents of the annual financial statements were examined for legal compliance and usefulness. The Board of Management and auditors answered all questions in detail and satisfactorily. Furthermore, the audit commission reported on the results of its audit and proposed approving the prepared and presented annual financial statements of ALNO AG and the consolidated financial statements of the ALNO Group. Following that, both the annual financial statements and the consolidated financial statements of ALNO AG were approved by the Supervisory Board. The annual financial statements were thus adopted. Furthermore, the report by the Supervisory Board for the financial year 2014 was finalised and adopted. Equally, the declaration on corporate governance / corporate governance report was approved. At the recommen dation of the audit commission, the Supervisory Board decided to propose to the annual general meeting that the annual financial statements for the financial year 2015 should be audited by PricewaterhouseCoopers AG Wirtschaftsprüfungsgesellschaft, Stuttgart.

On 7 April 2015, the Supervisory Board held a telephone meeting. The deliberations concerned the agenda for the annual general meeting on 2 June 2015 as well as the publication of the objectives for the composition of the Supervisory Board pursuant to Section 5.4.1 of the German Corporate Governance Code. Resolutions were adopted on both matters.

At the face-to-face meeting of the Supervisory Board on 24 April 2015, the deliberations and resolutions concerned the status of the restructuring project, the reorientation of the sales organisation, the Group’s business development including the foreign subsidiaries and invest-ments as at March 2015, and financing measures. The planned organisation of the 2015 annual general meeting was presented and discussed. Other topics were the presentation of the Logistics area, the development of the COO area and the structure of the bonus payment models for management levels below the Board of Management.

At the extraordinary face-to-face meeting of the Supervisory Board on 12 May 2015, the Supervisory Board discussed at very great length with the Board of Management the impact of selling Impuls Küchen GmbH and the appropriate selling price based on a fairness opinion drawn up by a market-leading consultancy. Based on this discussion, the Supervisory Board agreed with the Board of Management that further analyses would be prepared and the fairness opinion on the sale of Impuls Küchen GmbH would be updated.

During the extraordinary telephone meeting of the Supervisory Board on 27 May 2015, the Board of Management informed the Supervisory Board about the findings and insights from the additional analyses and the updating of the fairness opinion on the sale of Impuls Küchen GmbH. Following a detailed discussion, the Supervisory Board agreed on this basis to the sale of Impuls Küchen GmbH.

The annual general meeting on 2 June 2015 re-elected Mr Henning Giesecke, Mr Hubertus Krossa, Mr Norbert J. Orth, Mr Werner Rellstab and Mr Anton Walther to the Super visory Board, as representatives of the shareholders. Mr Hanns Rech, independent management con sultant at HRR Consulting AG, was newly elected to the Supervisory Board by the annual general


meeting, as a representative of the shareholders. By a court order on 21 January 2015, Mr Rech had already been appointed to the Supervisory Board as the successor of departed Super-visory Board member Dr. Marc Bitzer. In the employees’ elections pursuant to the One-Third Participation Act, on 5 May 2015 the following employees’ representatives were elected to the Supervisory Board of ALNO AG with effect from 2 June 2016: Mr Gerd Meyer, Ms Waltraud Klaiber (Chairwoman of the Works Council of ALNO AG) and Mr Christian Schwengel (Member of the Works of Council of Gustav Wellmann GmbH & Co KG).

At the meeting immediately after the annual general meeting on 2 June 2015, the newly- elected Supervisory Board held its inaugural meeting, at which Mr Hanns Rech was elected as the new Chairman of the Supervisory Board and employee representative Ms Waltraud Klaiber was elected as his deputy. The Strategy and Executive Committee now comprises Mr Hanns Rech (Chairman), Mr Norbert Orth and Mr Hubertus Krossa, while Mr Anton Walther, Mr Henning Giesecke and Mr Christian Schwengel were elected as the members of the Audit Committee. The Nominations Committee is comprised of Mr Hanns Rech (Chair), Mr Henning Giesecke and Mr Norbert J. Orth. At the inaugural meeting, the proceedings at the annual general meeting were also discussed, as was the business development during the current 2015 financial year.

At the face-to-face meeting of the Supervisory Board on 20 August 2015, the matters deliberated were the status of the restructuring project, the half-year results for 2015 and the development of business as of July 2015. The aforementioned matters were discussed at length with the Board of Management. The cornerstones of planning for 2016 were also discussed. In addition, an update was given on the joint venture in Russia and its establishment was approved. The changes to the internal governance procedures of the Board of Manage-ment were also adopted. There was an in-depth discussion about a gender quota for the Supervisory Board and the Board of Management and the relevant quotas were decided.

On 25 September 2015, the Supervisory Board held a face-to-face meeting at which discus-sions focused chiefly on business development as at August 2015 and the status of the financing measures. The Board of Management also reported on the status of the restructur-ing project and the project to integrate AFG Küchen AG.

The focal points of the face-to-face meeting on 1 October 2015 were the development of the markets and the sales strategy, the status of production at the Pfullendorf, Enger, Coswig and Arbon sites and the business development as at August 2015. Deliberations were also held concerning the status of planning for the 2016 financial year and the joint venture in Russia. The 2015 compliance statement was discussed in detail and decided upon by the Super visory Board. The Supervisory Board also resolved to exempt all members of the Board of Manage-ment of ALNO AG from the restriction imposed in Article 181 of the German Civil Code.

At the Supervisory Board meeting on 11 December 2015, the business development as at October 2015 was presented. The planning for the 2016 financial year was discussed in great detail with the Board of Management and changes agreed with the Board of Management.

At the extraordinary telephone meeting of the Supervisory Board on 23 December 2015, the Board of Management presented the revised planning for the 2016 financial year, which the Supervisory Board approved after extensive discussion.



Work in the committees

In order to carry out its tasks efficiently, the Supervisory Board has established the Audit Committee, the Strategy and Executive Committee and a Nominations Committee.

The Audit Committee held four meetings in the financial year 2015.

The Audit Committee held its first telephone meeting on 30 March 2015. The meeting was concerned with stating, explaining and discussing with the Board of Management and the company’s auditors the annual financial statements and management report of ALNO AG and the consolidated annual financial statements and management report of ALNO AG, in each case with the key date 31 December 2014. A resolution was proposed for the Super-visory Board regarding the annual financial statements 2014. Furthermore, a resolution was proposed for the Supervisory Board regarding the choice of auditor for the 2015 annual financial statements. As well as this, the members of the Audit Committee voted by e-mail or telephone on individual issues relating to the accounting process, preparation of the annual and consolidated financial statements, the management report process as well as the half-yearly financial report.

The second telephone meeting of the Audit Committee took place on 23 June 2015. At this meeting, Mr Anton Walther was elected as Chairman of the Audit Committee. Internal Audit’s quarterly report and findings from the risk management system and of the auditor during the audit of the 2014 financial statements were discussed and supplementary analyses agreed with the Board of Management.

The third telephone meeting of the Audit Committee took place on 28 September 2015. At this meeting, the current status of the audit findings for 2015 were discussed, and a review of risk management was agreed with the Board of Management.

The fourth meeting of the Audit Committee took place on 10 December 2015. At this meet-ing, the results for the audit for 2015, the outcome of the review of risk management and findings with regard to the compliance management system were discussed. In addition, the focal points of the audit of the 2015 financial statements were determined.

The Strategy and Executive Committee held three meetings in the financial year 2015.

During the first teleconference of the Strategy and Executive Committee on 23 March 2015, the 2014 annual financial statements, the business development as of February 2015 and financing measures and the status of the restructuring of ALNO were discussed.

During the second teleconference of the Strategy and Executive Committee on 16 April 2015, the business development as of March 2015 and the sale of Impuls Küchen GmbH were discussed.

During the teleconference of the Strategy and Executive Committee on 22 June 2015, the business development as of May 2015 and measures to improve production quality were discussed.

In addition to the meetings of the Strategy and Executive Committee, the committee members also held regular discussions with the Board of Management and the project managers regarding the organisation and implementation of ALNO AG’s restructuring projects.


The Nominations Committee held two meetings in the financial year 2015.

At the meeting of the Nominations Committee on 29 January 2015, potential candidates for elections for Supervisory Board members were discussed. Based on this discussion, a proposal to the annual general meeting was finalised.

An update on this was given at the meeting of the Nominations Committee on 24 April 2015.

Annual and consolidated financial statements

PricewaterhouseCoopers AG Wirtschaftsprüfungsgesellschaft, Stuttgart, audited the 2015 annual financial statements of ALNO AG according to the rules of the German Commercial Code (HGB), as well as the consolidated financial statements of ALNO AG according to Inter-national Financial Reporting Standards, and the single-entity and Group management report; they consequently met with the full approval of the auditors.

The auditors confirmed that the Board of Management has established an efficient risk management system in compliance with the statutory requirements, as well as an internal control system.

The statements to be audited and the auditor’s report were received by all members of the Supervisory Board in good time. The statements to be audited and the auditor’s report were discussed in detail with the Board of Management and the auditor at the meeting of the Audit Committee on 30 March 2016. The Supervisory Board received detailed information on the financial statements of ALNO AG and on the consolidated financial statements of the ALNO Group at a meeting on 31 March 2016. At both meetings, the auditors reported on the main findings of their audit, answered the Board’s questions and provided any additional information required. After detailed consideration and on the recommendation of the Audit Committee, on the basis of its own checks the Supervisory Board concurred with the auditors’ findings on the annual and consolidated financial statements. Following the definitive outcome of its review, the Supervisory Board has no objections to the annual financial statements, the con-solidated financial statements and the single-entity and Group management report. The Super-visory Board approved the annual financial statements prepared by the Board of Management, as well as the consolidated financial statements for the financial year 2015 at its meeting on 31 March 2016.

Corporate Governance

In the financial year 2015, the Supervisory Board – together with the Board of Management – also considered the further development of corporate governance principles in the ALNO Group, with due regard for the German Corporate Governance Code in the versions dated 24 June 2014 and 5 May 2015.

The report of the Board of Management and Supervisory Board on corporate governance by ALNO AG can be found in conjunction with the declaration on corporate governance on page 67 onwards.

On 14 April 2015, the 2014 compliance statement was updated due to a further departure in April 2015 from the German Corporate Governance Code in the version dated 24 June 2014.



On 1 October 2015, the Board of Management and Supervisory Board of ALNO AG issued a new compliance statement on the recommendations of the “Government Commission on the German Corporate Governance Code” in the version dated 5 May 2015, pursuant to Article 161 of the German Stock Corporation Act.

This compliance statement can be found on pages 67 onwards in this Annual Report and is permanently accessible to shareholders via the website www.alno.de.

Changes in the Supervisory Board and Board of Management

The following changes occurred in the Supervisory Board up to 31 March 2016:

As the composition of the Supervisory Board was no longer consistent with the requirements of the articles of incorporation following the resignation of Dr. Marc Bitzer on 31 October 2014, and ALNO AG was and still is undergoing a phase of restructuring, on 15 January 2015 ALNO AG applied for the court-ordered appointment of Mr Hanns Rech as member of the Super visory Board, on account of his professional expertise. Mr Hanns Rech was appointed as a member of the Supervisory Board of ALNO AG, as a representative of the shareholders, by decision of the district court of Ulm of 21 January 2015.

Mr Hanns Rech was elected as representative of the shareholders by the annual general meeting on 2 June 2015.

In the employees’ elections on 5 May 2015 in accordance with the One Third Participation Act, Ms Waltraud Klaiber and Mr Christian Schwengel were elected to the Supervisory Board of ALNO AG as representatives for a term of office commencing on 2 June 2015. The previous employee representatives, Mr Jörg Kespohl and Mr Rudolf Wisser, retired from the Super visory Board as of the end of the annual general meeting on 2 June 2015.

The Supervisory Board thanks Mr Jörg Kespohl and Mr Rudolf Wisser for their efforts and great dedication.

Due to the sale of Impuls Küchen GmbH to the Steinhoff Group, the employees’ represen tative and Chairman of the Works Council of Impuls Küchen GmbH, Mr Gerd Meyer, retired from office on 30 September 2015. The Supervisory Board thanks Mr Gerd Meyer for his efforts and great dedication. Ms Dagmar Heine, who had already been elected as a substitute candidate by the employees on 5 May 2015, took up office as employees’ representative on the Supervisory Board on 1 October 2015.

The following changes occurred in the Board of Management up to 31 March 2016:

With effect from 29 January 2015, Mr Manfred Scholz, COO, who was responsible for pro-duction, customer service, purchasing, quality / environment / energy and logistics, retired from the Board of Management of ALNO AG by mutual agreement.

The Supervisory Board thanks Mr Manfred Scholz for his efforts and the good working relationship.


With effect from 30 June 2015, Mr Ralph Bestgen, CSO, who was responsible for sales, marketing and product development, retired from the Board of Management of ALNO AG by mutual agreement.

The Supervisory Board thanks Mr Ralph Bestgen for his efforts and the good working relationship.

The remits of COO and CSO on the Board of Management were then allocated to Mr Max Müller, CEO.

The Supervisory Board wishes to thank the Board of Management and all employees of the ALNO Group companies for their efforts and great personal commitment in the financial year 2015.


For the Supervisory Board

Hanns R. RechChairman of the Supervisory Board



THE ALNO SHARE

The stock markets were significantly more volatile in 2015, following on from already high volatility the previous year. Affected by low interest rates and the European Central Bank’s massive bond-buying programme (€ 60 billion per month until at least March 2017), the European stock markets initially got off to a buoyant start to the new year. Starting at 9,806 points, Germany’s leading index, the DAX, had reached an annual high of 12,375 points by mid-April.

At this level, the mood changed. With the Greece crisis flaring up again, growing geopolitical uncertainty, cooling-off tendencies in China and other emerging economies and the imminent change of monetary direction by the US central bank, prices steadily fell. The downside pressure intensified in August, causing the DAX to drop below the 10,000 point threshold. In the course of the ensuing recovery, the leading index climbed against, standing at 10,743 points by the end of the year, a gain of almost ten percent compared with the end of 2014.

As the indices for small and medium-sized listed companies, the MDAX and SDAX tended to mirror this development but, thanks to a sharper rise at the start of the year and a less marked setback in the summer, they advanced far more strongly. The MDAX grew 23% and the SDAX gained as much as 27%.

The performance of the ALNO AG share mirrored this trend too. After starting the year at € 0.58, by the end of March the share was trading at a yearly high of € 0.91. Following the presentation of the financial results and influenced by the generally weak trading environment,

SHAREHOLDER STRUCTURE OF ALNO AGAs at 7 January 2016

14.08%

9.08%

6.65%

3.19%

3.00% 52.25%

2.65%

9.09%Whirlpool Germany GmbH

Paul Capital Partners

SE Swiss Entrepreneur AG / Alexander Shestakov

Shun Hing Electric Works & Engineering

Nature Home Company Ldt.

Max Müller & family

NORDIC Kitchen Holding AG

Freefloat


the price then dropped to a yearly low of € 0.44 by the end of September. The price recovered to € 0.72 a the year-end, on the back of the publication of pleasing financial results for the first nine months of 2015 and the arrival of our sales partner Shun Hing as an investor. Therefore, the ALNO share gained 24% in value in 2015.

Capital measures and changes to the shareholder structure

ALNO AG undertook two capital measures in the year under review. On 27 April 2015, a capital increase, excluding subscription rights, for 5.5 million new shares from the authorised capital was entered in the commercial register. The new shares with a unit price of € 1.05 per share were subscribed by Nature Home Holding Company Limited, Hong Kong. By buying additional shares, Nature Home increased its investment in ALNO to around 9.1%.

The second capital measure was the issue of a convertible bond in November 2015 with a nominal value of € 5.7 million. These papers entitle the investor Shun Hing Electric Works & Engineering Company Limited, Hong Kong to subscribe to 5.4 million ALNO shares. In addi-tion, Shun Hing acquired 2 million ALNO shares off-market, equating to 2.7% of the share capital. If the bonds are fully converted, Shun Hing will therefore hold 9.1% of ALNO’s capital in the future.

Another new shareholder of ALNO since 2015 is Alexander Shestakov, owner of our Russian partner company “Perwaja mebelnaja fabrika” (“1mf” – 1st furniture factory). According to the voting rights notification dated 22 December 2015, his share will be allocated to the share-holder SE Swiss Entrepreneur AG, Zug, Switzerland. The joint share according to the voting rights notification is a little over 3% on 21 December 2015.

Chairman of the Board of Management, Mr Max Müller, informed ALNO AG on 16 October 2015 that his voting share had exceeded the threshold of 3% of voting rights and, on that date, was around 3.5%. Together with his family, Mr Müller has since held around 6.7% of the shares.

Cognis S.a.r.l. also exceeded the 3% threshold in the financial year. According to the voting rights notification, the financial investor’s share on 13 May 2015 was around 3.2%.

According to the notification of 25 November 2015, Whirlpool had fallen below the 15% thresh-old. On that date, Whirlpool was reported to hold a share of around 14.1% in the share capital.

For more, please see the voting rights notifications on our website and the information in the notes to the consolidated financial statements in the “Equity” chapter.


The ALNO share

Directors’ Dealings

The following notifiable share dealings by executives were reported in the financial year 2015, as required by Article 15a of the Securities Trading Act (WpHG):

Investor Relations

The primary objective of ALNO AG’s investor relations work is to ensure a continuous dialogue with all capital market participants. In addition to the ad-hoc bulletins prescribed by law, as in previous years the company also published additional corporate news in the 2015 financial year, above all to provide institutional and private investors, as well as analysts, with timely and detailed information on current events and operational developments. In total, four ad-hoc bulletins and 18 corporate news were published.

Date Notifying person Number of sharesType of

transactionVolume

in €

30 November 2015 Comco Holding AG 14,400 Purchase 9,053

30 November 2015 SMARAGD HOLDING AG 36,478 Purchase 22,934

15 October 2015 Max Müller, Alno AG 300,000 Purchase 178,080

14 October 2015 Max Müller, Alno AG 600,000 Purchase 324,660

30 September 2015 Ludmila Müller 22,087 Purchase 9,939

30 September 2015Ludmila Müller,

Pymble Treuhand AG 24,100 Purchase 10,845

25 July 2015 HBconbet GmbH 50,000 Sale 35,750

ALNO AG SHARE PRICEfrom 2 January 2015 – 27 December 2015 in €

1.2

1.0

0.8

0.6

0.4

0.2

Jan. Feb. Mar. Apr. May June July Aug. Sep. Oct. Nov. Dec.0,2

0,4

0,6

0,8

1,0

1,2


The company management additionally spoke with selected representatives of the press, particularly in conjunction with the announcement of our detailed financial reports and interim statements for the individual calendar quarters. Furthermore, in its media relations ALNO pursues a continuous and active approach to inform media representatives about our company’s development and explain the reasons behind events and decisions. We also make use of the annual general meeting on 2 June at the Pfullendorf headquarters to present a comprehensive picture of our company and for in-depth dialogue with our shareholders.

All the main details relating to the ALNO share and current company developments are avail-able to investors on the company’s website www.alno.de in the section Investor Relations.

ALNOINOX


The ALNO share

01CORPORATE SOCIAL RESPONSIBILITY

22 Systematic, Group-wide personnel development

22 Training

25 Company healthcare management

25 Brand communication

26 Trade fairs and exhibitions

26 Awards and distinctions

CORPORATE SOCIAL RESPONSIBILITY

Systematic, Group-wide personnel development

As a result of demographic and social change, work-life balance is increasingly in the spotlight, including at ALNO AG. The company will be concentrating on this challenge over the next few years, making it a key component of the long-term personnel strategy.

Back in 2012, the ALNO Group began a Group-wide initiative for sustainable personnel development and continued with this with even greater emphasis in 2015. Personnel development in the ALNO Group is geared towards our strategy and the requirements, and covers the following key processes:

Employee qualification Succession and talent management Competence and performance management Company healthcare management

Leadership development is a key aspect of the personnel development strategy at ALNO AG. The leadership workshop is aimed at all senior executives in the Group. It is a modular develop-ment concept, usually involving one module per year. Following “Communication” and “Labour law”, the most recent (third) module “Situational leadership” was held. The leadership workshop is to be further expanded in 2016 and new modules are planned, such as “Healthy leadership” and “Change management”. As in the past, the leadership workshop is to be run exclusively by internal experts and trainers.

The modular training concept for leadership skills development for members of the Executive Committee, which was designed in 2014, was continued with even greater emphasis in 2015. Various individual personnel development measures were also staged, mainly department- specific further training. General product training on our own products and programmes and the materials and surfaces used complete our training range.

The focal points of the 2016 financial year are leadership development and young talent development. In addition, once the exhibition centre has reopened, there will be an even greater emphasis on product training.

Training

In-house training is a fixed element of the ALNO Group’s forward-looking personnel policy. The requirements are constantly changing, which is why ALNO is placing greater reliance on its own training. We want to challenge and promote our own young talents.

In the financial year 2015, the company had 93 trainees (previous year: 108) at its three locations in Germany (Pfullendorf, Enger, Coswig). 30 trainees successfully completed their training in the year under review. 27 training places were taken up in 2015.

The emphases of the training are, in Admin, the industrial business management assistant field and, in Production, the wood technician discipline. Industrial mechanics, electronics technicians for industrial systems and warehouse operators are also trained. In addition,


ALNOCERA

the ALNO Group also offers jobs to students of business administration, economic science and mechanical engineering (production and management) at the Baden Württemberg Univer-sity of Cooperative Education within the framework of the dual system of vocational training.

The technical training is rounded off by projects and such team-oriented measures as a joint, Group-wide kick-off for trainees when commencing their training. In 2015, at the trainee kick-off apprentices at the Pfullendorf site learned the fundamentals of successful teamwork, in a light-hearted way. Talents were also confronted with challenging projects and tasks relating to communication. ALNO AG regards contact with technical colleges and parents as impor-tant during training. During parents’ days in the company and on-site learning collaborations in technical colleges, information is shared about the performance level of young talents. Should any challenges arise during the training, these can be overcome more effectively if everyone involved in the professional training provides support.


Corporate social responsibility

Women are traditionally under-represented in technical vocations. ALNO’s aim is to increase the proportion of women in the medium term. For several years now, we have organised events in conjunction with “Girls’ Day”. Another “Girls’ Day” academy was held at ALNO too in 2015, during which girls interested in technology gained an even deeper insight into the technical applications and different companies over the course of a year. ALNO hopes to make technical vocations more attractive to young women and consequently to receive more job applications from women.

On 1 September 2014, ALNO AG’s training company, which was established in September 2012, began its third financial year and the baton was passed on to the new training year. Although a fictitious company, the training company is run by second-year trainees as if it were a real company. This provides young talents with an opportunity to familiarise themselves with business processes in a very real and practical way. Product development, purchasing, logistics, production, marketing and sales – the trainees take responsibility for all of these aspects, at their own company. From a very early stage, trainees can learn to make their own decisions and to think and act in entrepreneurial terms. By the end of their financial year on 31 August 2015, the trainees were generating a profit with their training company of € 2,864.21 thousand, compared with around € 2,460 thousand in the second financial year. As it did in the previous year, ALNO AG donated the profit on behalf of its trainee company. The trainees felt it was important to support social organisations in the region, so € 1,432.11 thou-sand were donated to the “Gegen Not” association that supports the German Red Cross Pfullendorfer Tafel food bank. A further € 1,432.11 thousand were donated to the “Radio 7 Drachenkinder” fundraising campaign for children in need. Since 1 September 2015, the trainee company has been run by the fourth generation. The “new team” made a very suc-cessful start to the financial year. As part of the Christmas campaign, the trainees presented their new products: a nativity scene and a festive window picture.

Learning a vocation is also the focal aspect of a social education project undertaken by ALNO together with the Sechslinden School in Pfullendorf. Educational partnerships are a model for success. The project seeks to intensify the collaboration between schools and businesses. On the one hand, it prepares the students for the transition to a working life. At the same time, however, the company uses the project to attract young people from the region to training at ALNO. The educational partnership was agreed as a long-term project in early 2012. It includes class programmes as well as multi-disciplinary and extra-curricular measures, such as a two-week vocational practical, introduction to different vocations and job application training. As a means of providing expert and authentic advice in schools, ALNO AG has en-gaged the ICC to continually train educational ambassadors from its own ranks of trainees. They then give talks in the classrooms on their choice of vocation and their fears and expec-tations with regard to their training. The educational ambassadors toured schools to talk about their training at ALNO AG again in 2015. Pupils at Sechslinden School were also invited to attend a course at ALNO AG on applying for jobs, which focused on how to dress for and conduct yourself at interview.


Company healthcare management

Active company healthcare management is an immensely important pillar of the human resources strategy in the ALNO Group, and also demonstrates that a value-oriented com pany policy has been established. ALNO AG regards maintaining the health of its employees as highly important – particularly with regard to demographic change – and is increasingly committed to all kinds of company healthcare management.

In 2015, ALNO AG took part in the global physical activity project “Global Corporate Challenge”, or GCC for short, for the second time; 203 employees of the Group joined in. The virtual journey for the GCC began on 27 May 2015. Over the next 100 days, our 203 participants took an average of 14,875 steps each day, significantly exceeding the target of 10,000 steps. They amassed a total of 188,915 kilometres between them. However, as well as motivating people to get physically active, GCC also gave tips for a healthy lifestyle. ALNO AG will be taking part in GCC again in 2016. The aim is to get even more employees active and raise health awareness further.

Brand communication

Clear and unambiguous positioning of the individual brands is an integral element of the ALNO Group’s business strategy. The ALNO brand in particular is exceedingly well known among consumers. Flanked by suitable marketing measures, ALNO will continue to use and develop this brand recognition sustainably.

The “One thing’s for sure: ALNO” brand and product campaign, which was newly launched for the ALNO brand back in October 2012, was stepped up abroad in 2015, with targeted POS measures in retail. It addresses the consumer directly and underscores the good feeling of having made the right decision when buying a kitchen.

In its efforts to continually develop its brand positioning, ALNO also expanded its product line with the addition of the new 715 mm carcass height. With well thought-out solutions, top quality and a considerable degree of flexibility, ALNO gives kitchen planners free range in realising their dream kitchens. To mark the launch of the new product line, as well as a training offensive, a wide variety of marketing support tools were developed for the retail trade and launched on the market.

The presentation of various kitchen concepts, combined with consistent marketing tools, was used identically on the DESIGN-TOUR and at subsequent association shows and exhibitions, to ensure ALNO’s autonomous and uniform brand identity. The uniform stand construction and the use of identical decorative elements and POS articles are the key elements. This consistent and standardised presentation is constantly being enhanced and will be anchored more strongly in the market in future. The large number of visitors at exhibition booths and the considerable interest displayed in ALNO and various awards confirm the positive response to the new brand portfolio strategy.



Trade fairs and exhibitions

Presentation of the ALNO, WELLMANN and PINO brands at national and international trade fairs and exhibitions is an important marketing tool in order to represent products, the brand and the design claim of ALNO AG. In direct communication with the trade, ALNO presented itself at established trade shows such as the “Kitchen and Living Trends” in Salzburg in 2015 or the annual “Kitchen Mile A30” show held in North Rhine-Westphalia. In September 2015, on its DESIGN-TOUR as part of the “Kitchen Mile A30”, the ALNO Group presented more than 70 fascinating kitchen concepts by the brands ALNO, ALNOINOX, WELLMANN and PINO at the Customer Centre at the Enger site, showcasing a whole host of new ideas on an area extending to around 3,500 square metres. The presentation of new products made a particularly strong impression.

The brand identity of the traditional ALNO brand also provided the conceptual basis for all the trade fair presentations. The stand architecture, for instance, was designed in the style of a building shell, in which the walls and floor of the exhibition space had a cement-like surface. A band of “concrete” conveys the form of a building structure and turns the wall, floor and ceiling into a building or room. The cement-like impression in the exhibition area is created by the use of a typical shell construction – forming the stage on which the kitchens appear. This show concept won the “Bronze Apple” at the 2013 “ADAM Award”. The ADAM Award is pre-sented by FAMAB in recognition of outstanding exhibition and brand images outside the context of exhibitions and trade show appearances. In 2015, the ALNO exhibition stand concept was among the winners in the “German Design Award 2015 – Special Mention”.

Awards and distinctions

ALNO AG won more well-known accolades for its ALNO brand and the associated product innovations in the 2015 financial year.

No less than three awards in the year under review confirmed ALNO’s outstanding performance in terms of customer focus and design – and continue the long series of distinctions in ALNO’s company history in impressive fashion.

In March 2015, the ALNO brand was recognised with the “Superbrands Germany Award 2014 / 2015”. With this, following on from 2009 / 2010 and 2012 / 2013, the company is once again among the outstanding German brands in the categories Brand dominance, Brand acceptance, Customer retention, Trust and Durability. The eminent jury of independent mar-keting experts from the realms of science, the economy, agencies, universities and the media industry assessed a total of 1,250 brands. In the end, 50 other brands as well as ALNO won the “Germany’s Best Brand” award. The international brand label is a yardstick for the evalu-ation of strong brands and is designed to offer guidance to the consumer.

Superbrands is an independent, worldwide organisation, headquartered in London. For 20 years, Superbrands has been honouring the best and strongest product and corporate brands, now in more than 85 countries. It is not so much about ranking the brands; rather, the inten-tion is to draw attention to and reward, in a unique way, the outstanding brands in each country, their achievements and their performance. The organisation is held in very high esteem around the world. Because of the organisation’s global stature, achieving Superbrand status promotes the national – and international – image value of the company that receives the honour.


ALNO picked up the German Design Award 2015 – Special Mention at the start of 2015 for its ALNOSHAPE / ALNOSUND product line and the trade show booth concept of “One thing’s for sure: ALNO.” ALNO is in competition with the best in the design business to win the German Design Award. Some renowned manufacturers were competing with each other in the “Home Interior” and “Excellent Communications Design” categories. The international premium prize is awarded annually by the “German Design Council”.

The award chosen by members of the public, Kitchen innovation of the year 2015, is parti-cularly important for ALNO. The consumer jury selected the ALNOSTAR PLAN in oxide grey for its “Excellent Product” award in the “Kitchen furniture and fittings” category. Initiative LifeCare is an independent organisation and its prize sets the seal of quality on particularly consumer-friendly products in the categories of material composition, design and innovation.

Not least due to these qualities, the ALNOSTAR PLAN is amongst the nominees for the inter-nationally highly regarded “German Design Award 2016”. The two innovative products, ALNOVETRINA and ALNOCERA Concretto, have also been nominated.

For the developers and designers at ALNO, these awards are a magnificent confirmation of their achievements while also spurring them on to set new standards in the future too with innovative design quality and progressive technologies.

ALNOSTAR DUR



02GROUP MANAGEMENT REPORT

30 Fundamentals of the Group

38 Economic report

50 Report on events subsequent to the reporting date

52 Forecast, risk and opportunity report

62 Significant features

63 Reporting

66 Declaration on corporate governance

1.1 Business model of the Group

1.1.1 Corporate structure of the Group

The ALNO Group develops, builds and sells kitchen furniture and accessories for the German market and for export worldwide. The parent company ALNO AG, Pfullendorf, acts as holding company with central administra tion functions and operates the production facility in Pfullendorf, as well as the sales division. In ad-dition to ALNO AG, the ALNO Group includes a total of 26 individual companies. The Group’s headquarters is located in Pfullendorf (Baden-Württemberg).

As at 31 December 2015, the ALNO Group combines five high-profile, independent brands under one roof: ALNO, WELLMANN, PINO, PIATTI and ALNOINOX / FORSTER SCHWEIZER STAHLKÜCHEN. This makes it possible to service all price segments from the entry- level model through to premium products. The ALNO Group ranks as one of the world’s largest kitchen furniture manufacturers.

1.1.2 Locations

Each of the total of three German production facilities currently has its own product portfolio. In Pfullendorf (Baden-Württemberg), ALNO AG manufactures kitch-ens under the ALNO and PIATTI brands. The plant in Enger (North Rhine-Westphalia), Gustav Wellmann GmbH & Co. KG, produces the WELLMANN assortment and own brands. The PINO brand is manufactured in Coswig (Anhalt) at pino Küchen GmbH. At the Arbon production site (Switzerland), steel kitchens are produced for worldwide sale (ALNOINOX brand) and for the Swiss market (FORSTER SCHWEIZER STAHLKÜCHEN brand).

1.1.2.1 Pfullendorf locationOn the closing date 31 December 2015, 582 employees (m/w) were employed at the Pfullendorf site, as the head-quarters of the ALNO Group. In the production facility, high-quality kitchens are individually manufactured for the ALNO, tielsa and PIATTI brands, sometimes in two-shift working. The facility also produces carcase elements, crown mouldings and base covers for the other production facilities within the Group. In 2015, output

totalled around 432,600 units. Delivery periods for the kitchen ranges manufactured in Pfullendorf for the ALNO brand equal four weeks.

ALNO focuses on modern, environmentally friendly man-ufacturing processes in its production. Among others, these include laser technology, which offers a range of advantages: Consumption of cleaning materials is sig-nificantly reduced, the connection between the front panel and surface is much cleaner. Mechanical strength is also increased. Paintable substrates can be painted without waiting time and the throughput times are signifi-cantly shorter because laser-bonded parts can be dried at higher temperatures. Furthermore, the material is sig-nificantly denser. This leads to a far better look overall, but also to better quality and harder-wearing properties.

Thanks to the fully-automated warehouse with saw, which was commissioned at the end of 2014, quantities of made-to-order fronts for customers increased by 28% in 2015. At the same time, the plant has developed its expertise in the production of components for materials such as melamine in batch sizes of 1, since ALNO is even more capable of attending to individual customer require-ments more effectively and at lower cost.

Because of the additional customer requirements for PIATTI products, the proportion of special production has increased from an average of 2% (for ALNO products) to 9% (for PIATTI products). This, in turn, place particular demands on the production system, in particular in terms of manual work and the relevant production technologies as well as the flexibility of processes and equipment. Through constant improvements in the special production processes and matching investment, the Group coped with the increase in the proportion of special production.

1.1.2.2 Enger locationThe Enger location produces kitchens for the WELL-MANN brand which are characterised by high flexibility in planning. WELLMANN kitchens are located in the middle price segment. In the market, the brand stands out through its excellent value for money.

1 FUNDAMENTALS OF THE GROUP


AFP Küchen AG, Arbon (CH) I 100%

ALNO AG,Pfullendorf

Zweitmarkenholding ImpulsPino GmbH, Pfullendorf I 100%

pino Küchen GmbH,Coswig (Anhalt) I 6% 94% I

ALNO IP AG & Co. KG,Pfullendorf I 99,8%0,2% I

Casawell Service GmbH,Enger I 100%

Gustav WellmannGmbH & Co. KG, Enger I 99,93%0,07% IGVG tielsa KüchenGmbH & Co. KG, Enger I 5,26%94,74% IALNO Trading GmbH,Enger100% I

ALNO China HoldingLimited, Hong Kong (CN) I 45%

tielsa GmbH,Pfullendorf I 45,5%

ALNO Logistik & Service GmbH, Pfullendorf I 100%

ALNO Middle East FZCO,Dubai (VAE) I 85%

A’Flair Habitat,Haguenau (F) I 100%

ALNO Beteiligungs UG,Pfullendorf I 100%

ALNO USA Corporation,New York / NY (USA) I 100%

ALNO Manhattan LLC,New York / NY (USA) I 100%

ALNO International GmbH,Pfullendorf I 100%

ALNO (Schweiz) AG,Nidau (CH) I 100%

ALNO U.K. Ltd.,Leeds (GB) I 100%

Bradbury’s of Exeter Limited,Exeter (GB) I 100%

Bradbury’s of Bristol Limited,Bristol (GB) I 100%

Küchen Nordic AB,Stockholm (S) I 61%

ALNO Surfaces Limited,Wolverhampton (GB) I 60%

Stourbridge Kitchens Limited, Stourbridge (GB) I 100%

Bradbury’s (Holdings) Limited,Exeter (GB) I 100%

OOO Perwaja mebelnaja fabrika – ALNO, St. Petersburg (RUS) I 49%


Fundamentals of the Group

With a workforce of 460 men and women on 31 De-cember 2015, the plant in Enger in the eastern part of Westphalia is the ALNO Group’s second largest produc-tion location. In 2015, output totalled around 783,200 units. Delivery periods for the kitchen ranges manufac-tured in Enger equal three weeks.

The Group invested in a new Homag edgebander for the production facility. This combines the cutting and edging process and automates several operations at the same time. The units were made much easier for customers to assemble through the installation of a CNC screw con-nection system in components production. As a result of the lean management process, the 5S Audit was im-plemented throughout the plant. There were also signifi-cant changes in the plant layout, which will optimise the production process further, such as dismantling shelving, the removal of storage space and the establishment of restricted areas. The receiving department in dispatch was also completely revised as a result of lean manage-ment and organised according to lean principles.

The “Wellmann Knowledge Database”, Wellmann’s Wiki-pedia, was officially activated in the customer service centre (CSC) and in the technology department. As a result all relevant information is administered centrally, which makes work far easier. The successful installation of PrimeFact has resulted in a considerable improvement in processes, the automatic provision of data (including special constructions and machine programming) as well as system and data consistency. Wellmann has now become the reference company for data consistency in the furniture industry and receives regular visits from interested industrial companies.

1.1.2.3 Coswig locationFounded in 1994, the Coswig facility with a workforce of 222 is one of the biggest employers in Saxony-Anhalt. With its PINO brand, the company is primarily targeting young and young-at-heart generations; it is located in the entry-level price segment. These low-budget kitchens in fresh, modern colours are sold through self-service and RTA departments in discount markets, retail outlets as well as in large furniture stores. The PINO brand’s streamlined range rounds off the ALNO Group’s large product range at the bottom end of the price scale.

The ultramodern, efficient assembly plant with low ver-tical range of manufacture operates in two shifts. Signif-icant production series of the PINO brand are kitchen panels with different direct coatings. The laminated paint technology panels included as a new feature in the range became a top-selling product in 2015. Account was taken of modern storage space designs with the addition to the range of 80 cm and 90 cm dimensions, making it easier to plan kitchens.

In 2015, the production facility produced ca. 720,000 units. 80% of the kitchens manufactured in Coswig are sold in Germany, 20% throughout the rest of Europe although the majority are delivered to Austria. End-to-end organisation of the supply chain makes for extremely short delivery periods in nationwide sales. As a result, the company can guarantee extremely short delivery periods of ten working days for its trading partners, even within five working days, if requested by the customer.

1.1.2.4 Arbon siteSteel kitchens are manufactured under the ALNOINOX and FORSTER SCHWEIZER STAHLKÜCHEN brands in Arbon in Switzerland. Since the takeover of AFP Küchen AG, Arbon, Switzerland, by the ALNO Group in January 2014, the kitchens are now marketed worldwide under the ALNOINOX name, while the FORSTER SCHWEIZER STAHLKÜCHEN brand name has been retained in Switzerland. ALNO is the most important steel kitchen producer for private customers in Europe. The Arbon site employs about 100 people in production, the kitchen service centre (export and retailers) and after sales.

The steel kitchens are made of sheet metal plates and honeycomb cardboard (sandwich process). The 0.6 to 1.5 millimetre thick metal parts are folded and punched fully automatically on a processing centre. On average, two parts are manufactured every minute, or 648,000 per year, with high precision. The production does not need any set-up time. About 50 tools are installed in the punch-ing head. The steel processing centre has been in oper-ation since the end of September 2012 and permits highly precise production with optimum use of material.

Production in Arbon was recently converted entirely to lean principles and has become even more efficient. The individual orders are now processed according to the principles of TQM (total quality management) and run extremely efficiently. The conversion process was completed with the commissioning of a new bonding


process. A new, modern paint shop was also installed in June 2015 at a cost of CHF 2.5 million. This will have a positive impact on the painting process, since the equip-ment allows very high quality coating and is extremely environmentally friendly in the way it operates. It also reduces throughput times significantly.

1.1.3 Products

During the 2015 financial year, the ALNO Group has presented numerous product innovations, additions to the range and technical highlights. The kitchen lines will appeal to customers with their high level of functions, clever details, ingenious design and flexible planning possibilities.

The ALNO brand has long since combined functional requirements and individual wishes – since 1927, kitchens from ALNO have embodied the highest quality, sensible innovations and award-winning design with the “Made in Germany” cachet.

ALNO builds on expertise acquired from more than 85 years of craftsmanship and continues to develop every day. However, its focus is always concentrated on people and their wishes and requirements, as every room is unique: the aim is to achieve the optimal combi-nation of functionality and design tailored to individual requirements resulting in a kitchen that is a pleasure to use. An aspiration that ALNO has adopted as its motto.

For the “Kitchen Mile A30” in September 2015, ALNO extended its product lines and introduced the 72 cm carcase height (5.5 grid). As a result, ALNO kitchens offer ideal storage space even with a lower balustrade height of 86 cm and will now fit into old buildings. Un-interrupted front panels with various fittings, even for the handle-free alternatives, are available to fit the new carcase height. 72 cm tall side cabinets with a door joint are also available. The range still contains the tried and tested 78 cm carcase height (6.0 grid) and this will remain a mainstay of the ALNO portfolio in future.

In future, in addition to the “Premium” pull-out alternative, the range will also offer the less expensive “Alpha” version with a white rounded rail instead of a square rail with a glass top. Both alternatives are available with Tip-On – a quick, light touch is enough for the drawer or pull-out to open automatically. It can be stopped in every position and closed conventionally. The two pull-out options

“Alpha” and “Premium” can be combined with all product lines and front panel ranges, giving absolute flexibility in planning your kitchen.

ALNO offers virtually unlimited design possibilities, open-ing up the perfect interplay of surfaces and colours in the kitchen. From dazzling glass or ceramic front panels, which are easy to look after, through hard-wearing ce-ramic or natural stone worktops to real glass niche elements: the options for combining the ALNO range of colours are unlimited and the range is now better matched to customers’ enthusiasm for stone and wood-effects. For instance, the fronts now include “walnut with an end-grain edge”, while the alternatives “Provence Pine” and “Concrete” were added to the worktops and niche elements.

The clever alternative to traditional tile splashbacks are ALNO’s glazed splashbacks – the new glass sur-faces or even melamine in future are easier to look after and less expensive than a tiled splashback.

Kitchens from WELLMANN stand for high value above the market average, while at the same time being situ-ated in the most attractive price segment that enjoys the highest level of demand. It offers customers a broad bandwidth of planning possibilities and technical op-tions – they will find details such as concealed wall cab-inet mountings, several LED light systems for handle profiles and handle recesses, a Bluetooth sound system that turns the doors in the kitchen into sound sources as well as a smartphone app that can be used for controlling the lighting and even changing the light temperature in the kitchen.

The WELLMANN grid system opens up almost unlimited possibilities for individual planning: The basis is the wide selection of cabinet widths and depths. To mark the “Kitchen Mile A30”, WELLMANN upgraded its side cab-inets with a 1,231 mm tall front panel, thereby bringing a greater sense of visual calm into the kitchen. The new height is based on the existing grid dimension and provides for uninterrupted front panels; the previous dowelled door joint has been dispensed with.

With new sliding doors for glass-fronted cabinets and wall units, WELLMANN will be offering even more design and planning options in future: The doors slide horizon-tally in front of the furniture unit on a system of rails only 10 mm wide, and can be moved along this discrete sec-tion in front of the structure without a handle. In contrast



to conventional doors, they do not project into the room when opened – a particular benefit in areas where only limited space is available: Close to the dining table, for example, this gives rise to flexible, new design possibilities and an additional attractive visual com ponent: sliding the door changes the constellation of “open” and “closed”, meaning that the cabinet’s appearance changes time and time again.

Linear, without handles, with gleaming glass and painted front panels: Kitchens from WELLMANN offer surprising details that embody aesthetics and durability – such as the gently shimmering metal in the handle recesses. To prevent anything spoiling the clear line, the handle- free drawers and pull-out units are also available with a mechanical Tip-On system. Simply touching the front triggers the opening impulse.

PINO offers people buying their first kitchen flexible plan-ning options and the fundamental functions of kitchens in higher price classes. The kitchen manufacturer from Coswig in Saxony-Anhalt extended its expertise in entry-level kitchens for the “Kitchen Mile A30” in Sep-tember 2015 and showed new painted laminate front panels and fresh design options. PINO makes the kitchen the place to meet, enjoy, laugh and have fun together in the twinkling of an eye.

PINO customers want beautiful kitchens at a reasonable price. Focused entirely on its young target group, the company will continue to produce painted laminate front panels and offer new planning possibilities.

PINO is focusing on new materials and adding to its high-gloss painted laminate range: in future, there will be three alternative surfaces, “matt”, “high-gloss” and “high-gloss metallic”. These new fronts in colours such as “matt magnolia white” or “metallic anthracite grey” are unique in the entry-level segment. With its extensive range of coloured melamine front panels, PINO also offers a very extensive selection in its market segment – the new colours range from concrete-look through walnut to avocado.

PINO introduced new dimensions and functions, opening up even more new design possibilities: The base units in 80 and 100 cm widths allow more flexible planning, tailored for the international market, and are available with a choice of revolving doors, drawers and pull-outs. In future, customers will be able to choose between 80 and 100 cm wide wall units as well. The new 1,043 mm tall

highboards provide visual accents and can also be used as stylish room-dividers.

Several flat LED lighting solutions offer the correct light by highlighting the working area and ensuring customers can see into drawers and cupboards – the range includes under-unit lights for wall units, panel lights for flat light and virtually invisible worktop or interior cupboard light-ing. The PINO range even includes pull-out lighting for drawers. Consequently, PINO offers the design options provided in the premium segment at attractive prices.

To simplify kitchen planning even with all the options available, the newly introduced PINO list of article codes is more logical: in future, the articles will be divided into the main types, base unit (B), wall unit (W), side cabinet (S) and appliance housings (A) – in each case, the code will start with the relevant letters. The last digits and letters will then define the features and design of the article. Accordingly, the range of types will be shown more clearly during the planning stage – making the process simpler and more logical.

The traditional Swiss brand PIATTI is continuing to develop products at the location where it was founded in Dietlikon. Through its proximity to customers, PIATTI can quickly identify trends as well as respond to require-ments at short notice. New products are launched on the market twice a year. The result is an assortment which appeals to customers through high variability as well as a wide range of materials and colours.

The high level of individualisation is an important com-ponent in success. With a special feasibility process, special wishes are recorded and then painstakingly prepared for production in the in-house work preparation department.

ALNOINOX, known in Switzerland as FORSTER SCHWEIZER STAHLKÜCHEN, is the only steel kitchen in Europe for the private customer market and has been manufactured in Arbon since 1952. The advantages of using steel as a basic material for building kitchens are clearly apparent. The smooth surfaces are easy to clean and hygienic. When surfaces do not have any pores, it is impossible for dirt to build up, and bacteria cannot gain a foothold. The steel kitchen can even withstand repeated intensive cleaning procedures with heat and water, be-cause it is rugged and robust. The kitchens are easy to look after, as well as being odourless and environ mentally friendly. They are known for their extreme durability but


most of all for their timeless and straight-line design and unique simplicity. The selected surface coating must withstand high test demands before it is used, and is resistant to fruit acid, for example. Corrosion is not a concern with galvanised steel, meaning that an ALNOINOX kitchen is also suitable for use in wet rooms.

Steel has good qualities in terms of ecological construc-tion. The content of various chemicals in other struc tural materials can lead to health problems, whereas steel does not emit any harmful substances and is absolutely odour-free. A certificate from Bern university confirms that the steel surfaces are free from formaldehyde, and also have very low values for other volatile organic com-pounds (VOCs). The one hundred percent reusability of steel and its long service life contribute to the environ-mental friendliness of ALNOINOX kitchens.

The ALNOINOX hinges are patented. The hinges can withstand very high forces and are only adjusted once. This means there will be no maintenance costs to bear in future years. They are cushioned and seamlessly integrated in the housing, meaning that the interior of the cabinet can be easily cleaned and optimally filled, since there are no projections.

ALNOINOX can be identified by its flush lines and smooth surfaces. Another characteristic feature is the sandwich processing using honeycomb technology to lend stability to the material and rule out any tinny noises.

For three years now, ALNOINOX has also been available with a high-grade metal surface featuring a brushed stainless steel look. The new look emphasises the metal character of the kitchen, allowing the grain of the mate-rial to be seen and giving the surface a special appear-ance. In addition, all stainless steel surfaces are grease- repellent, meaning that no visible fingerprints are left behind. As a result, the kitchen is easier to use and takes less effort to clean.

The powder-coated surfaces are available in all New Car Sales colours as before – the standard includes a har-monious range of colours.

1.1.4 Sales markets

Germany is an important sales market for the ALNO Group. With the joint venture established in Russia in the first quarter of 2015, ALNO AG has successfully pushed ahead with its globalisation strategy. Industrial pro-duction of between 25,000 and 30,000 kitchens per year is planned in St. Petersburg with its partner “Pervaya mebelnaya fabrika” (“1ff” – 1st Furniture Factory), which is one of the largest furniture manufacturers in Russia and based in St. Petersburg. The 1ff business belongs to the Alexander Shestakov group of companies, which owns a sales organisation including its own kitchen studio in addition to the furniture production plant. ALNO has a 49% stake in the joint venture. The plant of ALNO’s Swiss subsidiary AFP Küchen in Dietlikon was closed at the end of 2014 and production of PIATTI kitchens was shifted to the ALNO plant in Pfullendorf.

Apart from Germany and Russia, the target markets include Switzerland, the UK, France, the USA and China as well as Scandinavia.

1.1.5 Sales

1.1.5.1 Domestic salesIn Germany, the kitchens produced by the ALNO Group are marketed through kitchen and furniture studios, self-service and RTA stores, furniture stores, as well as through architects and building companies especially in the case of real estate projects. New sales channels for kitchens, such as Internet marketing, are also being developed for ALNO AG through trading partners. Most of the German trading partners are members of purchas-ing associations.

All trading partners in Germany are served by a trained team of field service staff in Germany, while project busi-ness is looked after by employees specialising in this field of business. The associations and major customers are specifically handled by our key account management.

The concept adopted by tielsa GmbH (ALNO’s share-holding 45.5%) focuses on the integration of SmartHome in the moving kitchen. tielsa is the first manufacturer worldwide to market SmartKitchens and is setting new standards in terms of how we live. This unique platform in conjunction with patents developed over many years gives the brand a unique selling point on the kitchen market.



1.1.5.2 Foreign salesThrough its consistent globalisation strategy, ALNO AG has increased its export quota significantly from 32.7% in 2013 to 56.1% in 2015. Additional sales are expected from the joint venture concluded with “Pervaya mebel-naya fabrika”, one of Russia’s largest furniture manu-facturers based in St. Petersburg, at the beginning of 2015. Through its international shareholding ALNO Inter-national GmbH, ALNO has owned 61% of the Swedish company Küchen Nordic AB since 1 October 2015. It provides a way into the attractive Scandinavian market.

The ALNO Group has commercial partners in 64 coun-tries. Sales of ALNO kitchens are handled by separate sales companies in Switzerland, the UK and the USA. ALNO also works abroad through competent local field staff and independent importers managed by the Export department at Group headquarters. Our foreign sales activities once again focused above all on acquiring new partners in other countries. The objective is to further build up the export proportion of sales by this move.

1.2 Objectives and strategy

The strategy defined for the ALNO Group was again implemented successfully in 2015.

The ALNO Group is pursuing the vision for designing living spaces in which people would feel at home, made possible by a globally leading kitchen manufacturer offering innovative products and intelligent solutions. In this, the vision of ALNO is based on a tradition spanning just under 90 years as a kitchen manufacturer. The kitchen is the central living space which is playing an increasingly central role in life. To take account of this, the ALNO Group offers innovative products that deliver added value and stand apart from the competition. At the same time, the company’s intelligent solutions serve the entire process sequence in order to achieve an advantage for customers. At the same time, the unique design ensures that kitchens from the ALNO Group make a flowing transition between the kitchen and adjacent living areas.

The strategic goals for the individual areas have been derived from this vision. The goal is to continue generat-ing sustainable values through profitable growth and further process optimisations.

1.2.1 Market objectives

Further progress was made with globalisation and the development of new sales channels in 2015. The pro-portion of export sales is to increase significantly in future to reduce dependence on the highly competitive German kitchen market still further. The market share in Germany is also expected to rise in coming years through more focused customer relations.

The positioning of the brand portfolio was sharpened through the sale of Impuls Küchen GmbH in the 2015 financial year (please refer to the Notes under B. 3 De-consolidations). This resolved the restrictions in the PINO and WELLMANN product ranges caused by overlaps with IMPULS and the ranges were optimised in line with customer requirements. This allowed the Group to target customer segments more specifically. The aim is to gen-erate substantial sales growth from this in 2016 and acquire significant market share. Key milestones towards a consistent customer-focus have been reached with the introduction of the simplified type code at PINO, the 78 cm tall carcase at ALTANO and CULINEO, as well as the 5.5 grid at ALNO and these are achieving the requisite success.

According to information from the GfK consumer re-search association, the German kitchen market contin-ued growing in 2015. With its brands and its product range, ALNO can cover about 80% of the price segments.

Geographically speaking, the D-A-CH region remains the core market for the ALNO Group, as it was previously. However, the greatest opportunities for growth can be found abroad. The objective is and will remain to increase further the foreign proportion of overall sales from its current level of about 56%. Moving forward, the key mar-kets are Switzerland, the UK, France, the USA, China and Scandinavia. The higher margins in the export busi-ness should further increase overall profitability. Also, it opens the opportunity for increased vertical integration.

AFP will also remain a mainstay of the ALNO Group. Together with Alno Schweiz, the ALNO Group is the clear market leader in the important Swiss kitchen market. Its market leadership is to be further extended in 2016. Customers in the international premium segment are to be targeted with the FORSTER / ALNOINOX brand and sales won.


A further step in the globalisation strategy has been taken with the acquisition of Küchen Nordic in Sweden and the establishment of the joint venture in Russia. The focus here is on the development of the Scandinavian and Russian kitchen market.

As well as the existing and established sales channels, the ALNO Group is also developing new ones. Accord-ingly, tielsa GmbH, Pfullendorf, a 45.5% shareholding of the ALNO Group, succeeded in concluding contracts with 41 exclusive retailers and consequently significantly exceeding the targets set for 2015. In the future too, the ALNO Group will rely on innovative concepts, thus bring-ing new business opportunities within reach.

1.2.2 Objectives for production

Starting from the strategy for the ALNO Group and the brand positioning, production will be focused on the respective customer and technological requirements. The Pfullendorf site will be further developed into an effective and flexible site offering order-related individual production and specialist processing skills involving paint, glass and ceramic, for instance. Production flexi-bility will also be increased at Enger, while at the same time improving efficiency. At the Coswig production site, the entire value-added chain will be reorganised towards a very lean production process for standards, the aim being to achieve clear cost leadership in this specific market and product segment.

The lean management principles introduced (ALNO pro-duction system) will be consolidated across the entire production process. The objective remains the steady optimisation of production processes, thereby laying the foundations for profitable growth. Furthermore, the basis will be established for integrating further acquisitions.

1.2.3 Objectives for distribution

Distribution and logistics services are also being reorgan-ised in conjunction with the ALNO Group’s reorientation. The main emphasis here is on introducing innovative systems and processes with the objective of increasing delivery frequency, thus improving service for the cus-tomer. This should be achieved above all by combining route planning and distribution.

1.2.4 Objective for the administrative areas

The administrative areas include accounting, controlling, IT and human resources. Implementation of the concept of centralising these areas started in 2015. An agreement on job cuts was reached with the Group works council in July 2015, which is being configured operationally at the individual sites and implemented. A “one company” approach is to be achieved through the centralisation. Expertise is to be combined and processes and pro-cedures carried out more efficiently and more cost- effectively to establish the administrative areas as highly effective service areas.

Customer service areas will also undergo further process optimisation. This will also fall within the centralisation of functions. The process sequence here will be consistently brought into line with customers’ requirements. This will optimise existing activities and open up new service offers.

1.3 Group management

The Group’s business activities are measured on the basis of sales and value metrics. Within the year, the individual Group entities are managed on a monthly basis, but also on a weekly and daily basis, through continual variance analyses to determine any divergence from budgeted figures and previous year’s values in all key operational areas.

Sales revenues and EBITDA are used as the most im-portant single indicators at segment level. In indivi dual cases, further indicators for controlling the efficiency of sales, production, quality and specific functions are contribution accounting, unit performance accounting and sales figures expressed in numbers of cabinet units. Cost centres and cost categories are monitored and analysed separately.

The quality of the product range and business pro - cesses is monitored and assured by quality management based on DIN EN ISO 9001. All production companies in the ALNO Group are certified companies subject to continuous external auditing by various institutes.



1.4 Research and development

The ALNO Group undertakes its product development in Pfullendorf, Arbon and Dietlikon. Development focuses on systematic and target Group-specific product and application innovations across all product lines. Charac-terised by its large breadth, advanced technologies and the high quality of the equipment, functionality and design, the range of products and services is expanded continually. Year after year, the ALNO Group’s product design and brand management win distinctions in international competitions.

The aim of product development is to consistently de-velop product and design innovations based on market requirements and end customer needs, thereby con-sistently strengthening ALNO as a key brand and rein-forcing its pronounced market position. Among other things, ALNO is extending its product line around the new 72 cm high carcase. With well thought-out solutions, top quality and a considerable degree of flexibility, ALNO gives kitchen planners free range in realising their dream kitchens.

With the addition of front panel ranges, newly developed unit systems, opening systems and functional systems in the standard ranges of the PINO and WELLMANN brands, the company meets customers’ needs in these entry-level and mid-level segments.

To simplify kitchen planning even with all the options available, the newly introduced PINO list of article codes is more logical:

The concept adopted by tielsa GmbH focuses on the integration of SmartHome in the moving kitchen. tielsa is the first manufacturer worldwide to market Smart-Kitchens and is setting a new standard in terms of how we live.

On the one hand, the tielsa kitchen can be ergonomi cally adapted to the size of each family member, and offers adaptable usage convenience in each stage of life. On the other hand, a large number of practical applications, such as light, music, domestic appliances and security systems can be easily controlled via an app and / or even by voice. All common SmartHome systems can also be easily con-nected. This unique platform in conjunction with patents developed over many years gives the brand a unique selling point on the kitchen or SmartHome market.

2 ECONOMIC REPORT2.1 Overall economic and

sector- specific conditions

2.1.1 Economic environment

According to information provided by the German Federal Statistical Office (Destatis), the economic situation in Germany was characterised by sound, steady growth in 2015. According to initial calculations by the German Federal Statistical Office, gross domestic product (GDP) adjusted for inflation was 1.7% higher on average in 2015 than in the previous year. GDP grew by a similar figure in the previous year (+1.6%), having only grown by 0.3% in 2013. Viewed over the longer term, it is clear that eco-nomic growth in 2015 again exceeded the average figure for the last ten years of +1.3%.

According to Destatis, German exports again gathered momentum in 2015: price-adjusted exports of goods and services were 5.4% up on the previous year. Imports rose by a similar rate (+5.7%), meaning that net exports, the difference between exports and imports, made a comparatively minor contribution to growth in GDP (+0.2 percentage points).

On the production side of GDP, both manufacturing industry (excluding building trades) and the services sectors contributed to the economic recovery in 2015. In comparison, the building sector reported a slight fall in economic output of −0.2% – despite predominantly mild weather during the winter months – in 2015, having reported strong growth in the previous year. Overall, the price-adjusted gross value added for all areas of the economy grew by 1.6% compared with the previous year in 2015, according to reports from Destatis.

For the first time, the economic output was generated by an average of more than 43 million people in gainful employment based in Germany in 2015. According to initial provisional calculations, some 329,000 or 0.8% more people were in gainful employment in 2015 than a year ago. As a result, the upward trend of the past ten years has been maintained. Labour productivity, measured as price-adjusted gross domestic product per labour hour, was 0.5% higher in 2015 than in the previous year. Labour productivity per person in employment has risen somewhat more sharply (+0.9%).


2.1.2 Developments in the furniture industry

The German furniture industry enjoyed a strong year in 2015. According to information provided by the German Furniture Industry Association (Verband der deutschen Möbelindustrie, VDM), sales by German companies in the industry, which features large numbers of SMEs, grew by 6.2% to € 17.38 billion. According to VDM, the satisfactory performance was well up on industry expec-tations and almost reached the pre-crisis level of 2008. However, VDM thinks the industry is still facing consid-erable challenges because of unremitting pressure from imports, substantial falls in unit prices in some cases and difficult distribution structures in Germany.

For the current year, the association expects further moderate growth of around 1%. On average, the German furniture industry employed 83,747 people in 499 com-panies last year.

2.1.3 Developments in the kitchen furniture industry

The German kitchen furniture industry increased its sales by 7% to € 4.575 billion in 2015 as a whole, according to statistics provided by the German Association of the Kitchen Furniture Industry (Verband der Deutschen Küchenmöbelindustrie, VdDK). Accordingly, the German kitchen furniture industry posted somewhat stronger growth than the German furniture industry as a whole in 2015.

Sales in Germany grew by 4.9% to € 2.897 billion. The strongest growth was achieved in the second half. According to the VdDK, in some cases the industry posted high, double-digit growth rates. The export ratio remained high throughout the entire year. In total, it came to more than 36.6% in 2015 according to the VdDK. This resulted in substantial export sales of € 1.679 billion, an increase of 10.9% compared with the previous year.

The number of employees in kitchen furniture companies remained largely constant. Having stood at 15,640 em-ployees in the first half, 15,806 people were employed in the second half.

2.2 General development of business

2015 went well for the ALNO Group. The key event was the sale of Impuls Küchen GmbH on 30 June 2015. According to GfK, the ALNO Group largely succeeded in keeping its market share (adjusted for Impuls) constant in 2015. Export sales were increased further.

2.3 Net assets, financial position and results of operations

2.3.1 Sales and earnings

The income statement for the ALNO Group (according to International Financial Reporting Standards) is based on the nature of expense method.

The gross profit margin identifier is calculated in the ALNO Group by dividing gross yield by sales revenues.

To guarantee more comparability, in some cases figures are mentioned “adjusted for Impuls” in the notes in this management report. For this purpose, income and expenses, which Impuls Küchen GmbH (“Impuls”) generated in the second half of the previous year, were eliminated (“adjusted”), meaning that the income and expenses of Impuls Küchen GmbH are only included for the first half in the 2014 and 2015 financial years. The sale took place on 30 June 2015.

To increase the comparability of operating results, the key figures of the ALNO Group in 2014 and 2015 were adjusted for the following special effects in advance: The purchase price allocation as part of the purchase of AFP Küchen AG (€ 71.3 million) and the gain on the disposal of Impuls Küchen GmbH (€ 28.7 million) were identified as material special effects in 2014 and 2015 respectively and adjusted. The gain on the sale of Impuls


Fundamentals of the GroupEconomic report

Küchen GmbH includes the purchase price received for the sale of the shares in the amount of € 24.0 million in total less € −4.1 million from the disposal of assets and liabilities as part of the deconsolidation. It also contains the sale of land and buildings, as well as machinery owned by Impuls in the amount of € 8.4 million as well

in € 000

2015(Adjusted for

Impuls and special effects)

2014(Adjusted for

Impuls and special effects)

Sales revenue 521,505 502,867

Changes in inventories and capitalised goods and services for own account −3,285 820

Cost of materials 291,787 291,551

Gross yield 226,433 212,136

GROSS PROFIT MARGIN (IN % OF SALES REVENUE) 43.4 42.2

Other operating income 29,486 6,617

Personnel expenses 136,429 132,500

Other operating expenses 119,918 114,437

EBITDA −428 −28,184

On an adjusted basis, the ALNO Group increased sales in the reporting period by € 18.7 million (+3.7%). The increase was primarily the result of strong growth in international business. Here, the ALNO Group is pursuing the strategy it has adopted of increasing the proportion of international sales significantly. The gross profit margin was increased to 43.4%. At the same time, EBITDA (adjusted for Impuls and the special effects) increased by € 27.8 million to € −0.4 million compared with the previous year.

as the Impuls brand rights in the amount of € 0.4 million. The restructuring expenses shown in both years were also adjusted.

Taking account of the above-mentioned adjustments, the following key figures for 2014 and 2015 are produced:


Excluding the adjustments mentioned, the key figures of the ALNO Group for 2014 and 2015 are as follows:

Consolidated sales in the 2015 financial year amounted to € 521.5 million, corresponding to a decline of € 24.3 million compared to € 545.8 million in the previous year. The fall in sales was attributable to the sale of Impuls. Adjusted for Impuls, consolidated sales rose by € 18.6 million from € 502.9 million to € 521.5 million, corresponding to growth of 3.7%.

Domestic revenues fell by 13.1% to € 229.0 million. Adjusted for Impuls, domestic sales amount to € 231.9 million in 2014 and therefore remained virtually

in € 000 2015 2014


Changes in inventories and capitalised goods and services for own account −3,285 593


Gross yield 226,433 230,125

GROSS PROFIT MARGIN (IN % OF SALES REVENUE) 43.4 42.2



Other operating expenses 119,918 121,207

Result from reorganisation (+ = expense / − = income) 13,515 8,925

EBITDA 14,771 39,957

Write-downs 26,232 33,710

EARNINGS BEFORE INTEREST AND TAXES (EBIT) −11,461 6,247

Financial result −12,972 −12,555

Earnings before taxes (EBT) −24,433 −6,308

stable (−1.3%). In a competitive market environment, the kitchen business was maintained through good business relations with key customers.

It proved possible to grow the export business signifi-cantly in 2015. Thanks to good market development in Switzerland and the UK in particular, sales increased by 3.6% to € 292.5 million. The export ratio rose accord ingly from 51.7% to 56.1% overall. Adjusted for Impuls, sales abroad increased sharply by € 21.6 million (8.0%).


Economic report

Germany€ 000

Change Abroad€ 000

Change Export ratio in %

Total€ 000Year € 000 in % € 000 in %

2013 265,854 −52,604 −16.5 129,202 1,402 1.1 32.7 395,056

2014 263,385 −2,469 −0.9 282,389 153,187 > 100.0 51.7 545,774

2015 228,956 −34,429 −13.1 292,549 10,160 3.6 56.1 521,505

Sales revenues in Germany and abroad developed as follows:

The foreign business is divided up as follows overall:

The development in cabinet unit numbers was as follows:

Changes in inventories and capitalised goods and services for own account amounted to € −3.3 million, following € 0.6 million in the previous year’s period. The fall is chiefly attributable to the sharp increase in the completion and invoicing of project orders at AFP at the end of 2015.

The cost of materials shrank by € 24.5 million compared with the previous year. The fall is chiefly due to the sale of Impuls. The gross yield fell from € 230.1 million to € 226.4 million, while the gross profit margin increased from 42.2% in the previous year to 43.4%. The price increases on the sales side in 2015 as well as improve-ments to the sales mix with high margin export sales played a key role in this development on an adjusted basis. Adjusted for Impuls, the gross yield rose by € 14.3 million to € 212.1 million, while the gross profit margin increased from 42.2% to 43.4%.

Total foreign countries

€ 000

thereofEurope

€ 000

Change

thereof other foreign

countries € 000

Change

Year € 000 in % € 000 in %

2013 129,202 117,877 5,126 4.5 11,325 −3,724 −24.7

2014 282,389 268,979 151,102 > 100.0 13,410 2,085 18.4

2015 292,549 277,600 8,621 3.2 14,949 1,539 11.5

Year Sales volume in thousands of units Incoming orders in thousands of units

2013 2,383 2,365

2014 2,680 2,684

2015 2,422 * 2,466 *

* Impuls included up to 30 June 2015

Other operating income decreased from € 78.2 million to € 58.2 million, most notably because of the effects in 2014 from the purchase price allocation as part of the acquisition of AFP in the amount of € 71.3 million. In 2015, other operating income contains the effects from the sale of Impuls. These relate to the purchase price received for the sale of the shares in the amount of € 24.0 million in total less € −4.1 million from the disposal of assets and liabilities as part of the deconsolidation. The sale of properties and buildings as well as machinery owned by Impuls in the amount of € 8.4 million is reported under income from the disposal of assets. Income from the sale of rights to use in the amount of € 7.8 million are also included in 2015.

Personnel expenses decreased most notably because of the sale of Impuls from € 138.3 million in the previous year to € 136.4 million. They were offset by an increase in wage costs and the number of employees. Adjusted for Impuls, personnel expenses increased by € 3.9 million.


The fall in other operating expenses to € 119.9 million from € 121.2 million in 2014 is chiefly due to the sale of Impuls. Adjusted for Impuls, other operating expenses increased by € 5.5 million, because of higher exchange rate losses in particular. However, increased expenses for transport, assembly by third parties and maintenance caused by the increase in the quantities produced were offset by savings on marketing / advertising and external service providers.

The result from reorganisation in the amount of € 13.5 mil-lion comprised the following in the 2015 financial year: The personnel expenses included in reorganisation expenses in the amount of € 8.3 million relate to redun-dancy payments, off-work salaries and other costs in conjunction with the employment and qualification com-pany as well as personnel expenses in connection with the relocation of the production of PIATTI kitchens from Dietlikon to Pfullendorf. The other operating expenses included in reorganisation expenses in the amount of € 4.5 million chiefly relate to the costs of reorganisation at AFP Küchen AG, most notably additional assembly costs in connection with the relocation of production of PIATTI kitchens from Dietlikon to Pfullendorf and costs related to the restoration of production halls in Dietlikon, among others. The costs of materials included in the reorganisation expenses in the amount of € 0.7 million relate to additional costs of materials from subsequent deliveries in connection with the relocation of production of PIATTI kitchens from Dietlikon to Pfullendorf.

Reorganisation costs in the amount of € 8.9 million were incurred in the 2014 financial year, which comprised the following: The expenses at ALNO AG were attributable to the deconsolidation of Alno Middle East FZCO, Dubai, United Arab Emirates in the amount of € 4.5 million. The expenses at AFP Küchen AG in the amount of € 6.0 mil-lion were connected with the closure of the plant in Dietlikon and the relocation of production to Pfullendorf, including personnel expenses in conjunction with redun-dancy payments in the amount of € 1.9 million. The result from reorganisation also included other operating ex-penses in the amount of € 1.9 million relating to other periods. These resulted from a legal dispute against the the former Chairman of the Board of Management which ALNO AG won on appeal.

In the 2015 financial year, depreciation fell sharply by € 7.5 million (22.2%) to € 26.2 million. Scheduled depre-ciation fell by € 5.7 million or 24.6% to € 17.5 million. Firstly, because of lower depreciation on the intangible assets in connection with the acquisition of AFP Küchen AG, secondly, as a result of the disposal of the fixed assets owned by Impuls Küchen GmbH on 30 June 2015. The unscheduled write-downs decreased in total by € 1.8 million (20.7%) to € 8.7 million and chiefly contain unscheduled write-downs on intangible assets owned by AFP Küchen AG, which were determined in im-pairment tests.

The financial result remained virtually unchanged in the 2015 financial year, at € −13.0 million, since the reduction of € 2.3 million in financial income from 2014 and the reduction in expenses from investments measured at equity in the amount of € 2.5 million in the 2015 financial year almost balanced each other out.

As a consequence, this produced a decline in EBT from € −6.3 million in the previous year to the current € −24.4 million.

2.3.2 Segment results

The ALNO Group’s internal management reporting has focussed on control according to sales channels since the 2014 financial year. The segmentation is therefore undertaken according to the Retail, Project business, End customer and Others sales channels.

The results of operations for the individual segments of the ALNO Group (before consolidation) are explained below.

Segment Handel

Change compared to previous year2015

€ m2014€ m € m in %

Net sales 343.5 392.9 −49.4 −12.6

EBITDA 5.7 −6.6 12.3 > 100.0

EBITDA in % 1.7 −1.7


Economic report

The Retail segment combines business with trading part-ners in Germany and internationally. Above all, this seg-ment is characterised by a strong market power held by the trading associations in the German market. Sales in this segment (before consolidation of internal sales) fell by € 49.4 million to € 343.5 million. This fall was chiefly the result of the sale of Impuls Küchen GmbH. EBITDA in the Retail segment increased from € −6.6 million to € 5.7 million in the same period (also excluding adjust-ment for Impuls). An upturn in foreign business played a key role in this development. By focusing more closely on international markets, the ALNO Group will also con-tinue to reduce its dependence on the highly competitive German market.

Project business segment

The Project business segment groups together the domestic and international business with building com-panies, property developers, architects, etc. This seg-ment has significantly increased, thanks above all to the positive performance by the foreign subsidiaries. Sales (before consolidation of internal sales) increased by € 32.7 million in comparison with the previous year to € 184.4 million. EBITDA has improved sharply by € 14.6 million chiefly as a result of the elimination of special effects in 2014 caused by the acquisition of and changes at AFP Küchen AG, but also because of the increase in sales.

End customer segment


€ m2014€ m € m in %

Net sales 184.4 151.7 32.7 21.6

EBITDA 7.7 −6.9 14.6 > 100.0

EBITDA in % 4.2 −4.5


€ m2014€ m € m in %

Net sales 33.6 29.5 4.1 13.9

EBITDA 3.3 0.5 2.8 > 100.0

EBITDA in % 9.8 1.7

The End customer segment chiefly includes the business with private end customers. This segment has become increasingly important as a result of the takeover of AFP Küchen AG and the expansion of the Group’s own shops abroad. This segment will be of great importance for the ALNO Group in future and will be expanded abroad in particular. Sales in the End customer segment (before consolidation of internal sales) increased by 13.9% to € 33.6 million, while EBITDA rose by € 2.8 million to € 3.3 million.

Others segment

The Others segment groups together all effects that cannot be directly allocated to the aforementioned segments. Chiefly, these are the costs of restructuring, the effects from the purchase price allocation as part of the takeover of AFP Küchen AG in 2014 as well as the sale of the ALNO brand within the Group, which will be eliminated as part of the consolidation and the effects from the sale of Impuls in 2015. Sales also contain sales from the former refrigeration business owned by AFP Küchen AG, which expired in the 2015 financial year. Sales in the Others segment (before consolidation of internal sales) accordingly decreased by € 3.4 million to € 0.4 million, while EBITDA fell by € 39.1 million to € 23.2 million.

ConsolidationIntra-Group issues, which are included in the segments, are also eliminated as part of the consolidation. Internal sales within the ALNO Group have been eliminated in the consolidated sales revenue. At EBITDA level, the under-lying consolidation entries in 2015 chiefly concern the elimination of the income from the intra-Group sale of the ALNO brand as well as effects from the capital consoli-dation. In 2014, they concerned capital consolidation and debt consolidation above all.


€ m2014€ m € m in %

Net sales 0.4 3.8 −3.4 −89.5

EBITDA 23.2 62.3 −39.1 −62.8

EBITDA in % > 100 > 100


2.3.3 Net assets

As at 31 December 2015, the total assets of the ALNO Group increased slightly by 2.0% from € 284.5 million to € 290.1 million. The explanations for this can be seen below.

On the assets side, non-current assets are € 6.8 million, or 3.9%, higher than in the previous year. This change results from the following circumstances:

the intangible assets decreased by € 6.9 million or 12.5%, above all because of scheduled (€ 3.0 million) and unscheduled write-downs (€ 8.4 million) on intangible assets connected with the acquisition of AFP Küchen AG in 2014. As at 31 December 2015, property, plant and equipment decreased by € 12.4 million or 11.2% to € 98.6 million. This decrease is attributable above all to the sale and disposal of fixed assets owned by Impuls.

Non-current receivables have risen sharply by € 9.2 mil-lion to € 12.7 million. The key reason for this is a loan receivable from AFP Küchen AG.

Deferred tax assets rose by € 16.7 million to € 18.3 mil-lion, primarily because of deferred tax assets on loss carryforwards. As at 31 December 2015, deferred tax assets were formed on loss carryforwards in the amount of € 18.2 million for the tax group of ALNO AG. Positive taxable results for the tax group of ALNO AG are expected in the next five years on the basis of a sharp year-on-year increase in EBITDA (adjusted for special effects) and on the basis of the measures taken in 2015.

Current assets reduced slightly by −1.1% to € 110.0 mil-lion. This was the result of the following circumstances:

Due, among other factors, to the disposal of the inven-tories owned by Impuls Küchen GmbH, inventories fell by € 6.0 million to € 28.8 million. Current trade accounts receivable increased, above all due to higher sales in the month of December 2015 compared with the previous year, by € 1.9 million or 3.2% to € 60.4 million. Current other assets rose by € 2.1 million, or 21.4%, from € 9.8 million chiefly because of higher prepaid expenses and receivables from the employment and qualification

company at the Pfullendorf site. Cash and cash equiva-lents rose by € 2.5 million, chiefly due to the receipt of funds from a loan in the amount of € 1.7 million in the final days of the 2015 financial year. The available-for- sale assets comprise technical equipment and machinery at AFP.

On the liabilities side, Group equity is € −30.6 million compared to € −28.0 million as at 31 December 2014. The change is chiefly attributable to the Group result for the period, to the capital increase carried out in 2015 and to the changes in provisions for pensions not affecting net income.

Non-current liabilities amounted to € 178.1 million follow-ing € 146.1 million in the previous year. This increase results from the following circumstances: The provisions for pensions rose by € 1.6 million or 5.6% to € 30.1 mil-lion, above all because of accounting for obligations for pensions of ALNO (Schweiz) AG and because of chang-es in the financial assumptions for measuring pension obligations. Non-current shareholders’ loans rose by € 21.6 million, whereby € 5.0 million was made available as a new loan in 2015 and the due date of a repayment in the amount of € 8.5 million was extended. Loans by a related party in the amount of € 8.1 million previously reported under current other liabilities was also trans-ferred to non-current shareholder loans. Non-current financial liabilities rose by € 6.6 million or 9.3% to € 77.8 million, largely because of the bond issued in November 2015 in the amount of € 5.6 million. Non-cur-rent trade accounts payable increased by 29.7% to € 25.3 million because of the extended moratorium agreement for trade accounts payable with Bauknecht Hausgeräte GmbH, Stuttgart.

Current liabilities decreased by 13.4% to € 144.1 million. This reduction was the result of the following circum-stances: As at 31 December 2015, other current financial liabilities reduced significantly by € 12.0 million, or 39.7%, to € 18.2 million, above all because of the extension in the due date of loans granted by related parties in the amount of € 8.1 million and because of a reduction of € 5.3 million in financial liabilities to credit institutes. Current trade accounts payable and other financial liabilities fell by € 4.0 million, or 3.9%, to € 98.9 million,


Economic report

which is attributable above all to lower deferred liabilities for customer discounts as well as a slight reduction in current trade accounts payable. The increase in current, remaining other liabilities of € 2.4 million, or 16.4%, to € 17.0 million was chiefly the result of higher deferred liabilities for bonuses and social security.

2.3.4 Liquidity and financial position

The net cash flow for operating activities shows a cash outflow of € 28.5 million in the year under review (previous year: cash inflow of € 15.2 million), which is largely the result of changes in working capital. This was attribut able firstly to an increase in trade accounts receivable, most notably in project business, but was also due to higher sales in the month of December compared with the previous year as well as an increase in other assets. Secondly, trade accounts payable have also increased,

Development in net indebtedness

As of 31 December 2015, the net indebtedness of the ALNO Group increased by € 5.2 million compared with the previous year’s reporting date. This increase is based on the following circumstances: The shareholder loans and other financial liabilities have increased primarily as a result of a new shareholder loan of € 5.0 million and the bond in the amount of € 5.6 million (nominal amount

31 December 2015in € 000

31 December 2014in € 000

Changein € 000

Changein %

Shareholder loans and other financial liabilities

non-current 119,414 91,152 28,262 31.0

current 19,679 40,202 −20,523 −51.0

139,093 131,354 7,739 5.9

Less liquid assets −4,844 −2,270 −2,574 > 100.0

134,249 129,084 5,165 4.0

€ 5.7 million) issued in November 2015. Cash and cash equivalents rose by € 2.5 million from € 2.3 million as at 31 December 2014 to € 4.8 million as at 31 Decem-ber 2015, chiefly due to the receipt of funds from a loan by AFP Küchen AG in the amount of € 1.7 million in the final days of the 2015 financial year.

chiefly due to an extension in payment targets, albeit to a far smaller extent than in the previous year. Investment activities resulted in a cash inflow of € 21.5 million in the financial year 2015, as compared to a cash outflow of € 52.7 million in the previous year. This sharp change is mainly due to the outpayments for the purchase of AFP Küchen AG in the previous year and the inpayments received for the shares as part of the sale of Impuls Küchen GmbH in the 2015 financial year and for sales of real estate, buildings and machinery. The decline of € 26.8 million in net cash and cash equivalents received from financing activities predominantly resulted from incurring financial liabilities, which are lower than in the previous year. In the previous year, the compulsory convertible bond with a nominal volume of € 14 million was included, as was the bank finance for the purchase of AFP. In the 2015 financial year, this was offset by a capital increase for cash with a cash inflow in the amount of € 5.8 million.


2.3.5 Annual financial statements for ALNO AG in accordance with the German Commercial Code (HGB)

Income statement for ALNO AG in accordance with the annual financial statements pursuant to the German Commercial Code (HGB) for 2015

in € 000 2015 2014


Changes in inventories and capitalised goods and services for own account 102 42


Total operating performance 194,723 131,814



Other operating expenses and other taxes 46,910 45,110

EBITDA 37,686 −16,132

Write-downs 4,413 4,578

EBIT 33,273 −20,710


EBT 21,323 −21,953

Extraordinary result −3,051 −832

Taxes on income 0 −20

NET PROFIT FOR THE YEAR (PREVIOUS YEAR: NET LOSS) 18,272 −22,805

In the 2015 financial year, ALNO AG recorded an increase in sales in the amount of 3.1%. In Germany, sales reve-nues fell by 10.8% due, above all, to declining sales from large outlets and through kitchen specialists, while sales revenues abroad increased significantly by 29.9%, due among other things to supplying AFP Küchen AG with PIATTI kitchens produced at the Pfullendorf site.

At 60.6%, the material quota was up slightly on the level of the previous year (60.0%). Consequently, the gross profit margin, at 39.5%, fell by 0.5 percentage points compared with the previous year.

Other operating income increased by € 59.9 million from € 37.6 million to € 97.5 million primarily because of the intra-Group sale of the ALNO brand. Personnel expenses rose sharply by 10.8% to € 51.3 million. Apart from the wage increase negotiated through collective bargaining, this increase was caused by more people being employed at the Pfullendorf site. Compared with the previous year, other operating expenses and other taxes have risen virtually in line with the increase in sales, namely by € 1.8 million, or 4.0% to € 46.9 million.

The financial result decreased in the 2015 financial year by € 10.8 million from € −1.2 million to € −12.0 million. Above all, the increase in expenses from the assumption of losses from € 0.1 million to € 19.1 million in the 2015 financial year was a factor here; the increase was pri-marily due to the assumption of losses by Zweitmarken-holding Impuls Pino GmbH, which were € 18.4 million higher in 2015 than in the previous year. They were offset by an increase of € 9.9 million in income from profit trans-fer agreements, in particular from Impuls Küchen GmbH, which was sold in the 2015 financial year.

Compared with the previous year, the extraordinary result has deteriorated in the 2015 financial year by € 2.3 million from € −0.8 million to € −3.1 million. In the 2015 financial year, € 1.8 million of expenses for the social plan and the employment and qualification company at the Pfullendorf site are included here. This item also contains expenses for provisions for onerous contracts in connection with a service provider. In the previous year, extraordinary income in the amount of € 1.9 million was included from the judgment in favour of ALNO AG issued by the Düsseldorf Higher Regional Court on 6 November 2014


Economic report

against a former Chairman of the Board of Management (please refer to the remuneration report in the Group Notes for details) was included here. This was offset by extraordinary expenses in the amount of € 2.7 million. These resulted from the following circumstances: Alno Middle East FZCO, Dubai, UAE, had to be deconsolidated

due to a court order and an associated loss of control retrospectively to 1 July 2014. Production there had to be stopped. In this connection, the investment book val-ue in the amount of € 1.0 million was written down ex-traordinarily and receivables from this company totalling € 1.7 million were derecognised.

Balance sheet of ALNO AG in accordance with the annual financial statements pursuant to the German Commercial Code (HGB) as at 31 December 2015

in € 000 31 December 2015 31 December 2014

ASSETS

Fixed assets

Intangible assets 2,569 5,236

Property, plant and equipment 17,674 18,001

Financial investments 154,438 112,922

174,681 136,159

Current assets

Inventories 10,591 9,037

Receivables and other assets 82,930 81,321

Cash in hand, bank balances 629 551

94,150 90,909

Deferred items 2,579 3,279

Excess of plan assets over pension liabilities 99 60

271,509 230,407

LIABILITIES

Equity

Subscribed capital 75,595 70,095

Capital reserve 3,533 3,258

Legal reserve 462 462

Net loss −5,892 −24,164

73,698 49,651

Provisions 31,205 27,740

Liabilities 166,603 153,016

Deferred items 3 0

271,509 230,407


The key changes on the assets side concern financial assets in 2015. These rose by € 41.5 million (36.7%) from € 112.9 million as at 31 December 2014 to € 154.4 million. This increase was chiefly the result of the addition of in-vestments in the affiliated companies ALNO IP AG & Co. KG (€ 56 million) and ALNO International GmbH (€ 20.8 mil-lion), of write-downs on the investment in the affiliated company Zweitmarkenholding Impuls Pino GmbH (€ −35.4 million) and of the disposal of the investment in Impuls Küchen GmbH (€ −0.3 million). Trade accounts receivable rose by € 3.0 million (88.2%) from € 3.4 million as at 31 December 2014 to € 6.4 million. Receivables from affiliated companies decreased by € 3.1 million (4.4%) from € 71.0 million as at 31 December 2014 to € 67.9 million.

On the liabilities side, the key changes concern above all the reduction in the net loss for the year (from € −24.2 mil-lion as at 31 December 2014 to € −5.9 million as at 31 December 2015) based on the positive result for the year in the amount of € 18.3 million. Provisions increased by € 3.5 million (12.6%) from € 27.7 million as at 31 De-cember 2014 to € 31.2 million as at 31 December 2015, primarily due to higher provisions for outstanding invoices, for working hours and for the employment and qualification company. Liabilities rose by € 13.6 million (8.9%) from € 153.0 million as at 31 December 2014 to € 166.6 million, which is chiefly attributable to the com-pulsory convertible bond newly issued in 2015 in the amount of € 5.7 million, to an increase of € 3.1 million in trade accounts payable and to an increase of € 2.1 million in liabilities to affiliated companies. The equity ratio ( equity divided by total assets) has increased signifi cantly compared with the previous year from 21.5% to 27.1%.

2.3.6 Overall assessment of the ALNO Group

The Board of Management of ALNO AG assesses per-formance in 2015 positively. This positive development was adversely affected by highly negative non-recurring effects from the relocation of production from Dietlikon to Pfullendorf and therefore failed to meet the expec tations of the Board of Management. The inefficiencies resulting from the relocation of production and the reductions in quality associated therewith in the PIATTI product range were rectified by November 2015. Since then AFP Küchen AG has been concentrating on regaining the trust lost

among Swiss customers through a series of measures and boosting the level of sales significantly in 2016. As a result of this, the managing board of AFP Küchen AG was restructured.

To increase earnings further, the Board of Management pressed ahead with its comprehensive restructuring programme in 2015. The key elements involve a further expansion of the globalisation strategy, further centrali-sation of the sales and administrative units as well as optimising the brand and product portfolio. In opera-tional terms, this will lead to a sustained improvement in the organisation and more efficient market development. For this purpose, substantial investments in IT, machinery and market expansion are required. All these measures focus on making the ALNO Group’s dealings with cus-tomers simpler, more efficient and leaner. All restruc turing measures are focused on ALNO creating a win-win situation for its customers and achieving shared profit-able growth. The aim is to ensure the profitability of the ALNO Group long-term.

2.4 Financial and non-financial performance indicators

2.4.1 Financial performance indicators

Sales revenues and EBITDA are used as the most important single indicators at segment level. In individual cases, further indicators for controlling the efficiency of sales, production, quality and specific functions are contribution accounting, unit performance accounting and sales figures expressed in numbers of cabinet units. Cost centres and cost categories are monitored and analysed separately.

2.4.2 Non-financial performance indicators

Human resources (m/w)On the closing date 31 December 2015, the ALNO Group employed 2,099 people (m/w). This compares to 2,289 in the previous year. Of the 2,099 employees, 1,161 em-ployees (m/w) were working in production at the end of the year (previous year: 1,346). This figure includes the reduction in jobs resulting from the closure of production in Dietlikon, Switzerland.


Economic report

164 employees (m/w) (previous year: 180) were working in administration. There were 563 employees (m/w) work-ing in marketing and sales (previous year: 558) and 211 employed in other areas (previous year: 205). At the end of the financial year, 1,490 people (m/w) in total (previous year: 1,643) were employed in Germany, while 609 (pre-vious year: 646) were employed abroad.

The ALNO Group needs highly qualified and motivated employees in order to realise its strategy and growth targets. The organisation of work is based on a spirit of openness and mutual respect and fairness. Performance is rewarded through profit-oriented remuneration systems and opportunities for personal development.

3 REPORT ON EVENTS SUBSEQUENT TO THE REPORTING DATE

Extension of Max Müller’s contract

At its meeting on 22 March 2016, the Supervisory Board of ALNO AG decided to extend the contract with the Chairman of the Board of Management Max Müller pre-maturely until 31 December 2018.

Extraordinary dismissal legally binding

After a process lasting just under five years, ALNO AG can finally close the Deisel chapter. The Second Civil Chamber of the Federal Court of Justice (FCJ) in Karls-ruhe has rejected the two appeals against the refusal of leave to appeal by the former Chairman of the Board of Management. As a result, his extraordinary dismissal, which took place in April 2011, is legally binding.

The Düsseldorf Higher Regional Court (HRC) had already allowed the appeals by ALNO AG in their entirety in November 2014 and rejected the claims by the former CEO against his extraordinary dismissal in April 2011. The amount in dispute in the two proceedings came to approx. € 6.5 million. Had the dismissals been invalid, ALNO AG would have faced claims in the amount of up to € 7.5 million, which have consequently been finally averted.

Agreements with shareholders

On 31 July 2015, ALNO AG entered into a long-term mor-atorium agreement with Bauknecht Hausgeräte GmbH, Stuttgart, which lasts until 30 December 2016. The agreement replaced the moratorium agreement dated

0

500

1000

1500

2000

2500

WORKFORCE DISTRIBUTIONDOMESTIC / FOREIGN

1,4901,643

609646

2,099

2,2892,500

2,000

1,500

1,000

500

0

Germany Abroad Total

2015

2014

0

500

1000

1500

2000

2500

1,161

1,346

164180

563558

211205

2,099

2,2892,500

2,000

1,500

1,000

500

0

Production Administration Marketing& sales

Other areas Total

−13.7%

−8.9%

+0.9%

+2.9%

WORKFORCE STRUCTURE / CHANGEBY AREA

2015

2014

−8.3%


10 December 2014 which was limited to 31 March 2016. On 15 March 2016, a new moratorium agreement cover-ing total receivables in the amount of € 41.0 million was concluded to formalise the verbal agreement reached in December 2015, under which a partial amount of € 25.0 million will be repaid in stages from 29 September 2017 to 30 June 2018. The remaining € 16.0 million is due to be repaid in various tranches up to 31 December 2016.

For the loan, which the ALNO Group was granted by Bauknecht Hausgeräte GmbH, Stuttgart, in the amount of € 30.0 million in total on 11 April 2013, it was agreed by means of a supplement to the loan agreement of 26 February 2015 that a partial amount of € 10.0 million, which was due in September 2015, will not be due for repayment until July 2016. By means of a verbal agree-ment in December 2015, which was formalised in writing on 15 March 2016, the repayment of this partial amount of € 8.5 million would be extended by a further year until 31 July 2017, the remaining partial amount of € 1.5 million is due for repayment on 30 September 2016. The term of the remaining € 20.0 million remains unchanged.

On 16 January 2015, Bauknecht Hausgeräte GmbH, Stuttgart, granted ALNO AG a loan amounting to € 5.0 million until 10 March 2015. Repayment of the loan was extended by various supplementary agreements; the last time being the formalisation on 15 March 2016 of the verbal agreement reached in December 2015 to extend the loan until 31 July 2017.

For the loans, which the ALNO Group was granted by Comco Holding AG, Nidau, Switzerland, in the amount of € 8.1 million in total, it was agreed by means of a supplement to the loan agreement of 26 February 2015, that the originally intended repayment in April 2015 would be extended until July 2016. The term of the loans was extended until 31 July 2017 by means of a verbal agree-ment in December 2015, which was formalised in writing on 15 March 2016.

Other financing activities

By means of a notarised property purchase agreement dated 3 February 2016, ALNO AG and an affiliated com-pany have sold part of their factory premises subject to the condition precedent of agreeing the final purchase price as part of a sale & lease back transaction. The final purchase price and the final rental terms will be negotiated in the second quarter of 2016. An advance payment of € 15.0 million secured by mortgages was made by the purchaser in February 2016.

In the event that ALNO AG cannot raise sufficient funding to cover its liquidity requirement, Comco Holding AG, Nidau, Switzerland, will grant ALNO AG a funding line in the period from March to May 2016 up to a maximum of € 11.0 million.

Development of sales and new orders January to February 2016

At € 66.8 million, the net sales of the ALNO Group were well up on the previous year’s figure (adjusted for the sale of Impuls) (€ 62.2 million) and above budget in the first two months of 2016. The current orders received in the ALNO Group were also well up on the previous year and are continuing their steep upward trend. On this basis, the Board of Management confidently expects that the planned sales and revenue targets for the 2016 business year will be achieved.

Going concern / risks threatening the existence of the Group

The company strategy of ALNO AG is focused on the globalisation of its markets, making production in Ger-many more flexible, centralising administrative units and optimising the brand and product portfolio. Operationally- speaking, this will lead to a sustained improvement in the organisation and more efficient market development. Substantial investment in IT, machinery, marketing and market expansion is required for this purpose and is planned. Implementation of the company’s strategy is dependent on implementation of the planned financing measures and the prompt receipt of funds.

ALNO AG is also planning a financial or capital measure for the second quarter of 2016, which will lead to a cash inflow of some € 40 million.

The ALNO Group will receive additional funding in the double-digit millions from the execution of the property purchase agreement of 3 February 2016 mentioned above.


Economic reportReport on events subsequent to the reporting date

The ALNO Group as a going concern is dependent on the planned financial and capital measures amounting to being made available in full and on schedule, as well as continuation of a stringent liquidity management pol-icy. If necessary, investments will have to be postponed or reduced. Furthermore, the assumptions in the cor-porate planning, especially with regard to profit / loss and liquidity targets, will have to be accurate as planned.

4 FORECAST, RISK AND OPPORTUNITY REPORT

4.1 Forecast report

4.1.1 Development of the market and in the ALNO Group

The kitchen market developed positively in 2015. Accord-ing to the GfK consumer research association, the German kitchen market grew by 11.2% in 2015 (in terms of sales revenues in euros) compared to 2014. In terms of quantity sold, the market grew by 4.5%. Important key factors in this development were:

Panels made of painted laminate continued to gain substantial market share. The proportion of the overall market increased from 3.5% in 2014 to 13.0% in terms of quantity and from 2.8% in 2014 to 12.2% in terms of sales revenue. The proportion of film panels fell in the same period. The ALNO Group participated here and achieved a market share of 5.8% with painted laminate panels in 2015 (in terms of sales revenues in euros).

The retail outlets and kitchen specialists sales channels increased their shares in 2015. Retail outlets increased by 3.9% in terms of quantity and 4.7% in terms of sales revenue. Kitchen specialists increased by 8.5% in terms of quantity and 15.6% in terms of sales revenue. In view of this situation, positive growth impulses are expected for the ALNO Group.

According to GfK, the market share of the ALNO Group (adjusted for Impuls) fell slightly in 2015 (from 11.5% to 10.8% in terms of sales revenue).

The ALNOINOX steel kitchen was presented at Euro-cucina in 2014. This kitchen represents a special unique selling point for the ALNO Group in relation to its com-petitors. In the international business above all, this is expected to lead to growth impulses for the ALNO Group.

At the “Kitchen Mile A30” show in September 2015, the ALNO Group again presented lots of new ideas from its four brands ALNOINOX, ALNO, WELLMANN and PINO. In 2015, attention was focused above all on the introduc-tion of the new 72 cm carcase at ALNO, which is to open up new customer segments. Also, the innovations from tielsa GmbH focusing on the future topic of “moving kitchens” were shown. With its wide range of brands, ALNO is underpinning its product expertise while actively addressing the needs of a young, active buyer group.

4.1.2 Growth

To expand the more profitable international business, in addition to the AFP purchase, subsidiaries have been set-up or expanded in the USA, the UK, Switzerland and Sweden and a joint venture has been established in Russia in recent years. The ALNO Group is expect-ing further sales growth from these foreign companies in 2016.

These initiatives will become apparent in the order books of the ALNO Group as well. Orders received in the ALNO Group were already above the level of the previous year in the first two months of 2016 and are trending upwards.

4.1.3 Business development 2016

The signs for an improvement in the economy in 2016 are positive. The International Monetary Fund (IMF) is forecasting global economic growth of 3.6% in 2016, compared to 3.1% in 2015. The IMF is expecting growth of 1.6% in the eurozone, compared with 1.5% in 2015.


The general conditions and perspectives for the kitchen market in 2016 are positive according to the Association of Wood and Plastic Processing Industries (VHK). In 2015, growth in the German kitchen industry was driven above all by exports.

The introduction of the 72 cm carcase at ALNO and the clear positioning of the brands will have a significant impact on business development in 2016. This will firstly target new customer groups and secondly ensure de-mand is much better matched through a more attractive range of services. The Board of Management is confi-dent that this will also result in significant growth in the domestic market.

Higher sales volumes will have a positive effect on pro-duction by increasing capacity utilisation. The corres-ponding increase in the gross profit margin will result in fixed costs falling more quickly and the operating result improving significantly overall.

Optimisation of manufacturing towards lean, flexible production will remain at the centre of various Group projects in 2016. To this end, additional investments amounting to about € 7.0 million will be required.

However, the forecast wage increase from the collec-tive-bargaining round in 2016 will have a negative impact and will lead to an increase in personnel costs in the ALNO Group.

Sales revenues (adjusted for Impuls) have improved by 3.7% to € 521.5 million. Overall, sales revenues therefore matched our updated forecast in the half-year financial report 2015 of a slight increase in sales (adjusted for Impuls) for the 2015 financial year.

EBITDA before restructuring (adjusted for special effects) has improved significantly by € 27.8 million from € −28.2 million to € −0.4 million in 2015, meaning that the forecast presented in the annual report 2014 and confirmed in the half-year financial report 2015 of a significant increase in operating EBITDA (excluding non-recurring and special effects) was achieved. Including special effects, EBITDA before restructuring amounted to € 28.3 million in 2015.

In view of the measures initiated, in particular, the ac-celeration of the globalisation strategy and the centrali-sation projects in Germany, the Board of Management

is assuming that, with no changes to the Group structure and after adjustment for the special effects from the sale of Impuls in 2015, sales and EBITDA will increase signifi cantly in 2016.

A marked growth in sales is expected in 2016 for each of the segments Retail, Projects and End customer, hand-in-hand with a significant growth in the respective EBITDA.

At € 66.8 million, the net sales of the ALNO Group were well up on the previous year’s figure (adjusted for the sale of Impuls) (€ 62.2 million) and above budget in the first two months of 2016. The current orders received in the ALNO Group were well up on the previous year and are continuing their steep upward trend.

For the separate financial statements of ALNO AG, a marked increase in sales combined with a marked im-provement in operating EBITDA compared with the previous year is also expected after adjustment for the special effects from the sale of Impuls in 2015.

The risks and opportunities inherent in the aforemen-tioned forecasts are explained in the following risk and opportunity report.

4.2 Risk report

Risk management system

To undertake and safeguard its business operations, the ALNO Group has implemented systems and procedures, as well as setting up committees allowing the Board of Management to recognise risks jeopardising the company’s existence at an early stage and to react accordingly. Risks are identified, evaluated, managed and monitored in the ALNO Group on the basis of a Group-wide system ensuring timely detection and monitoring of risks with the elements of controlling risks on an operational level, an internal monitoring system for timely detection of risks jeopardising its survival, strategic controlling of the participating interests and controlling of all reorganisation measures and Group projects.

The management of Group risks takes place in line with the objective of achieving a fair balance between oppor-tunities and risks.


Report on events subsequent to the reporting dateForecast, risk and opportunity report

All risks are described in a well structured manner with-in the framework of the ALNO Group’s operational risk controlling, and are evaluated according to their eco-nomic impact and probability of occurrence.

Individual risks are sorted by risk class and by net ex-pectation value within a risk class.

Following the implementation of risk limitation meas-ures, only risks in risk classes B and C remain.

To improve transparency regarding the risk portfolio, risk management software from Opture AG has been used as a web-based solution for all areas of the ALNO Group since January 2015. The risk management software permits efficient and systematic recording of all sig-nificant risks, comprehensive risk quantification as well as integration in planning, monitoring, reporting and measures controlling.

On the basis of the risk management software, the effi-ciency with which risks and control measures are record-ed has been significantly increased, thereby creating the basis for central control of the Group-wide risk portfolio for ALNO AG on a cost-optimised basis within the year.

By multiplying the maximum amount of the effects of individual risks in euros by the probability of occurrence in euros, it is possible to calculate the gross expectation value for risks prior to measures being taken and the net expectation values after the measures. On the basis of the magnitude of the expectation value, risks are grouped into A, B and C risk clusters. A risks are potentially high risks in terms of amount, and are associated with a high expectation value; B risks represent moderate risks and C risks are low risks, with medium or low effects in terms of magnitude and expectation values, respectively.

For management of the risks, plans of action are defined for all risks. The implementation of these measures is monitored by an ongoing operational controlling process. Risks and measures are updated continuously. This integrates all risk-relevant data throughout the Group within a uniform system platform, making them trans-parent and reproducible for the management and for the employees affected.

Operational risk controlling is accompanied by a com-prehensive reporting system, the content of which is continuously reported to the Board of Management.

For timely detection of risks, the Board of Management also receives corresponding ad hoc information.

Operational risk controlling does not record any risks which have been transferred to third parties (e.g. insur-ance companies, subcontractors) by means of risk trans-fer measures. Insured risks or risks outsourced to third parties are not included in the gross expectation values.

Since the beginning of 2014, the Group is not primarily seen in terms of legally independent units, but instead as individual sales channels which receive their products from various legally independent entities (see also the explanations on segment reporting in “F. Notes to the segment reports” in the Group notes). This means that the Group can respond better to the different require-ments of the individual sales channels, thereby improving Group control. The full impact of the centralisation meas-ures initiated in the 2015 financial year will be felt in 2016 and will make an important contribution to improving this process further. The integration of the risk management system in this process, which was started in the 2015 financial year, will be completed in 2016.

Even if Group control is no longer primarily undertaken via legally independent entities, the strategic controlling of participating interests will continue to regard risks and opportunities on the basis of market and competition analyses, which form the basis for management deci-sions, especially with regard to the globalisation strategy, in 2016. In addition, controlling of participating interests will also monitor the achievement of business targets on the basis of legal units and will manage the Group com-panies on the basis of standard indicators in 2016. In this way, the basis permitting the timely detection and initia-tion of measures to minimise risks is established.

All mergers & acquisitions (M&A) and reorganisation measures as well as all important Group projects are planned with regard to the activities for implementation, deadlines, effort and benefits, and monitored by an ongoing controlling process.

Risks due to redundancies, inefficiencies or bottlenecks in the flow of operations must be made identifiable within the ALNO Group by means of the risk manage-ment system. The measures that are initiated for this purpose are done with regard to their effect on the most important partners and customers in the individual sales channels.


Particularly the ALNO Group’s trade receivables are protected through trade credit insurance; adequate liquidity management is assured within the framework of an integrated Group receivables management system taking into account customers’ needs and security con-siderations. Development of the cash flow is monitored by a Group-based liquidity controlling process which simultaneously provides relevant parameters for timely decisions by the management.

The following were identified as material risks (without significance):

Financial risks

Risk descriptionIf no measures are taken, the risk of a liquidity bottleneck exists within 12 months, in particular during the months from January to April, as well as during the plant’s summer holidays in 2016. The risk of a liquidity bottleneck will thus be eliminated by a wide variety of measures.

At the moment, the ALNO Group operates predomi-nantly on the basis of credit balances with banking insti-tutes. On the closing date 31 December 2015, the ALNO Group had current accounts and loans in the amount of € 19.8 million with two Swiss banks as well as an invest-ment loan in the amount of € 0.3 million, which could be terminated without notice among other possibilities, if there were to be an actual or threatened significant impairment in economic conditions or the fair value of collateral, thus endangering repayment of the loans. If this financing were to be called in or subjected to extraordi-nary termination, the ALNO Group would be reliant on additional capital in the form of external capital or equity.

Measures Ongoing monitoring and control of the liquidity reserves. In the ALNO Group, financial risks are hedged with the aid of planning and management instruments permitting timely detection of liquidity risks. ALNO AG essentially acts as financial coordinator for all Group companies in order to ensure that the financing re-quired for the operational business is always adequate and as cost-efficient as possible. The information re-quired for this will be updated in the course of rolling financial planning and supplemented with a short-term planning horizon of 13 weeks and a long-term horizon

of up to 15 months by means of a daily liquidity develop-ment planning, which is continuously compared with actual payment flows.

Safeguarding liquidity in the ALNO Group in 2016 and 2017. The central focus of the Board of Management of ALNO AG in 2016 and 2017 will continue to be con-cerned with safeguarding the short and medium-term liquidity situation in the Group. Consequently the Board of Management of ALNO AG has initiated a package of measures to safeguard the liquidity of the ALNO Group, involving the following main aspects (see also “3. Report on events subsequent to the reporting date” as well as the information about ensuring continuation as a going concern under “B.1. Basis for preparation of the financial statements” in the notes):

1. Agreements of measures to secure liquidity with Bauknecht Hausgeräte GmbH, Stuttgart, in particular concerning moratorium agreements, shareholder loans, bonus prepayments, agreements on bridge financing and extensions to payment deadlines

2. Carrying out additional financial and capital measures

3. Agreements on loans and bridge financing with Comco Holding AG

4. Agreements on extending payment terms with selected suppliers

5. Agreement on current account lines and loans with financial institutions for ALNO AG

6. Agreement on new bank loans for foreign companies

7. Control of ongoing liquidity requirement by controlling the investment timings and by managing working capital as well as using leases to finance investments

8. Realising liquidity injections in the double-digit millions through the sale of real estate


Forecast, risk and opportunity report

Market risks

Risk descriptionGermany: Germany is the ALNO Group’s main market, accounting for around 44% of the total sales revenue. In the kitchen furniture sector, the ALNO Group operates in a market characterised by fierce competition. The pressure on margins is increasing constantly due to fiercely competitive prices, especially in the lower price segments, and this could simultaneously squeeze manufacturers out of the market; at the same time, mar-ket shares could be lost. The activities and competitors, particularly chains of large outlets and self-service furni-ture stores, could lead to distinctly lower sales revenue and earnings for the ALNO Group.

The ALNO Group’s customers are primarily retailers, the vast majority of whom belong to purchasing associations. If major purchasing associations were to reduce their order volumes or terminate blanket agreements, and if the ALNO Group were unable to win new customers of comparable magnitude or were unable to obtain a com-mensurate increase in the volumes ordered by existing customers, this could lead to a reduction in capacity utilisation and sales revenue for the ALNO Group.

Abroad: Sales markets of the ALNO Group in Europe outside Germany include the United Kingdom, France, Austria, Switzerland, Spain, Italy and the Benelux countries in particular. These markets have developed differently in the past. ALNO AG presumes that the in-dividual markets will continue to develop differently in the future too, depending on the influence of economic factors.

ALNO generates a significant proportion of its sales rev-enues in the project business in Germany and abroad. A decline in new building activity as a result of changes to financial market conditions or in legislation could post-pone or reduce the sales quantity.

MeasuresIn order to reduce dependency on the highly competitive domestic market and consequently corresponding market risks within Germany, the Board of Management has been pursuing a globalisation strategy since 2013 (see also “4.3 Opportunities report”), the first milestone of which was reached in 2014 through the acquisition of AFP in Switzerland. Another milestone was reached

in January 2015 with the foundation of a joint venture in St. Petersburg. This joint venture’s new production facilities will start operating in 2016.

Additional strategic acquisitions are in the pipeline. Moreover, further organic growth is planned for 2016 in Europe, China and the USA. Further organic growth is planned in Europe by transferring the highly successful business model of the English subsidiary ALNO UK to other foreign countries. Positive effects from this will only start to bear fruit in 2016 and the full effect will not be felt until 2017 due to the lead time involved.

Significant strategic and structural changes were put into effect in the existing business in 2015 for sales in the ALNO Group. They will optimise the effectiveness and efficiency of sales in Germany and abroad to increase market penetration in the intensely competitive market.

Redesign of the assortment and an increase in produc-tivity at the market also improved price competitiveness from 2015 onwards.

Further effects will be derived from optimisations to processes and systems, implementation of a new sales control system and a programme of incentives for em-ployees in sales.

Abroad in particular, competitiveness will be improved by a more intensive alignment towards country-specific, customer-orientated contracts, sales activities as well as order-handling processes. Furthermore, the foreign activities of the ALNO Group are increasingly focusing on markets with a higher revenue quality.

In 2016, the ALNO Group will also continue the path it started of intensifying sales activities in selected foreign markets, such as the USA, China and Russia.

Supplier risks

Risk descriptionThe ALNO Group purchases the raw materials and supplies needed to manufacture its products from a variety of suppliers. The elimination of one or more these major suppliers could significantly impair the ALNO Group’s business activities.


Supply bottlenecks at significant suppliers could impair the production sequence and thus make it impossible to discharge delivery obligations temporarily.

MeasuresThe dependence on individual suppliers or unscheduled material price rises is counteracted by continuous metho-dological sourcing of potential alternative suppliers with self-disclosure, description of products and services, audits and creditworthiness checks.

Delivery bottlenecks are counteracted at existing and new suppliers through intensive technical and commer-cial support. Relations with different suppliers are also maintained for similar products.

Production and quality risks

Risk descriptionThe products manufactured by the ALNO Group could be faulty or defective. This could impair sales of the prod-ucts and services by customers and lead to obligations under warranties.

MeasuresQuality risks are reduced by ongoing quality control of the production and order handling processes, further development of the quality planning system, expansion of quality control loops, implementation of the quality strategy and upgraded checks as well as by compen-sation agreements with suppliers. The measures to re-duce quality risks are based on a comprehensive quality strategy which contains specifications and appoints people responsible for the quality policy, quality guide-lines, quality definitions, quality targets, quality improve-ment systems, organisation, image and benchmarks.

Strategic risks

Risk descriptionTo continue the sustained improvement in the net assets, financial position and results of operations of the ALNO Group, a new restructuring project for 2016 was started following the successful conclusion of the restructuring project 2015, which aimed to make production between Enger and Pfullendorf more flexible.

Implementation of the centralisation of the ALNO Group’s administrative and support areas was started in 2015 and will be completed in 2016.

As part of this restructuring project, substantial additional improvements in earnings and liquidity are to be achieved in 2016 by optimising processes in the key operational areas, namely production, sales, customer service, purchasing, personnel, and the foreign subsidiaries. The restructuring project 2016 requires investments and the application of workforce capacity. Delay in providing these resources represents a risk that options for com-pensating for deviations in earnings and liquidity cannot be created in time.

MeasuresA project controlling system has been established with a suitable project organisation for the restructuring pro-ject 2016. Amongst other things, the project controlling system is based on weekly reporting of the project status for each sub-project with statements about results, next steps, required decisions as well as tracking the project development using the completion level and traffic light status. The project organi sation consisting of the follow-ing organisational units: project management, sub-pro-ject leaders, as well as regular management meetings permit effective and efficient control of the restructuring project 2016.

The project controlling system and project organisation create an ongoing overview of the status of the restruc-turing project. This means that the risk of a project delay is counteracted through timely escalation as well as the application of countermeasures through the project organisation.

IT risks

Risk descriptionA large part of the ALNO Group’s order handling, pro-duction, warehouse management and accounting is based on computers. ALNO AG has outsourced part of its IT systems and services. Failure of the computer systems or problems with the contractual relationships regarding provision of services could lead to a disloca-tion in working procedures.



MeasuresIT risks were and are gradually reduced by investment in improvements to failsafe performance (replacement of outdated systems by ones with high availability, redun-dant communication connections, backup solutions, stabil ity-oriented release changes, suitable emergency plans), expansion of in-house application and system expertise, replacement of existing in-house systems by standard systems and orientation of the IT strategy towards the company strategy in line with increasing production flexi bility and centralising the administration and support areas.

Price risks

Risk descriptionWood, metal, plastics, glass and ceramics are the most important raw materials for ALNO. Changes in the mar-ket price of these materials could have a corresponding impact on development of the Group’s margins.

Further risks exist, in particular, with regard to the trend in service costs. To a very large extent, the ALNO Group would be unable to pass on higher costs to its customers, or only after a delay. This could have a negative impact on margins and earnings.

MeasuresAn annual planning process for each goods group with an estimate of the effect of market prices, structural changes and projects creates the basis for an adequately reliable statement regarding necessary price increases, thereby achieving satisfactory margins and revenues. Ongoing monthly controlling is carried out with regard for actual prices of materials and services for each goods group, with detailed analysis of savings potential, price increases and structural effects, thereby allowing decisions to be taken for early-stage countermeasures if price increases are introduced mid-period. Further-more, negotiations on price fixes are carried out with suppliers to reduce the risk of an unscheduled price rise that cannot be passed onto customers.

Risks of default / credit risks

Risk descriptionInsolvencies in the Trade segment could expose the ALNO Group to the risk of bad debts. If customers receive deliveries above the insured lines, there is addi-tionally the risk of these receivables not being covered in the event of the threat of insolvency or inability of the customer to pay. The proportion of non-insured receiv-ables is less than 3%. The bad debt quota was less than 1% in the past.

MeasuresIn conjunction with Group receivables management, minimum requirements as regards creditworthiness and maximum exposure limits have been defined for all business partners of the ALNO Group. These are based on a system of defined limits for which compliance is constantly monitored.

Trade accounts receivable, which are not covered by trade credit insurance, are controlled through regular coordination between central Group receivables man-agement and sales. An SAP-based credit management system supplies an effective basis for taking decisions on measures that must be taken within the context of receiv-ables management, on the basis of an automatic com-parison between credit lines and the outstanding re-ceivables from each customer across all brands.

Overall risk assessment

From the current perspective, the Board of Management regards the overall risk situation as manageable, taking account of the aforementioned risks. At present, no further significant risks are apparent which could weaken the net assets, financial position and results of operations sustainably.

4.3 Opportunities report

4.3.1 Globalisation strategy

A) Inorganic growth abroad

Joint venture RussiaIn January 2015, ALNO AG signed a contract to establish a joint venture in Russia. The partner is “Pervaya mebel-naya fabrika”, one of the largest furniture manufacturers


in Russia, based in St. Petersburg. It belongs to the Alexander Shestakov group of companies, which owns a furniture production plant as well as a sales organisa-tion and its own kitchen studios, amongst other assets. It is planned to start industrial production for about 25,000 to 30,000 kitchens per year in St. Petersburg in 2016.

Through this cooperation, ALNO AG is opening up one of the biggest kitchen markets in Europe that has achieved regular double-digit percentage growth in recent years.

Further inorganic growthThe growth targets of the ALNO Group will include the strategy of inorganic growth moving forwards. For this purpose, further takeover opportunities are being exam-ined on an ongoing basis through permanent, systematic screening of the market. The focus in this is directed not only towards a product fit and improving the utilisation of existing resources, but also a match-up with the company values of the ALNO Group. By integrating additional takeover candidates into the ALNO Group, it is intended for growth and synergy potential to be lever-aged and profitability improved further.

B) Organic growth abroad

AFP Küchen AGThe takeover of 100% of the shares in AFP from the Swiss AFG Arbonia-Forster-Holding in January 2014 was a first important milestone towards meeting the objective of generating inorganic growth. AFP is the market leader in Switzerland. AFP owns the two brands, PIATTI and ALNOINOX / FORSTER SCHWEIZER STAHLKÜCHEN. An increase in sales with these new brands is planned for 2016, particularly on the basis of the globalisation strategy for the ALNOINOX brand.

With the growth at AFP Küchen AG planned for 2016 and a continuation in the growth at ALNO (Schweiz) AG, ALNO AG will also secure the leading position in the Swiss kitchen market, which is a stable environment with a high price level and ranks as one of the growth fastest growing markets in Europe with an annual increase in excess of 3%, in 2016. At the same time, ALNO AG will significantly increase the export proportion of its sales revenues in 2016. As a result of efficiency programmes embarked upon at the end of 2012 at PIATTI and FORSTER SCHWEIZER STAHLKÜCHEN, the purchasing advantages which resulted from the merger and the

successful integration of PIATTI completed in 2015, ALNO AG is expecting significant synergy effects to come into play in 2016.

EuropeBack in 2014, ALNO AG succeeded in entering in coop-eration with strategic partners in the markets of France (FBD Group), Spain (TSK) and Scandinavia ( Vordingborg, Kitchen Nordic), thereby positioning itself favourably with regard to competitors with these customers.

Further expansion in Scandinavian countries is planned for 2016 with the partner Küchen Nordic in Sweden, which was successfully taken over by ALNO AG in 2015.

As far as the other partnerships are concerned, plans are in place to press ahead in 2016 with the expansion embarked upon in a positive market environment in 2015.

In Benelux, cooperation with MHK is being promoted further through the market entry of ALTANO. Further-more, in 2016 too, the focus will remain on attracting new customers and continuing to implement the growth strategy that was implemented in 2014 with major customers in Belgium and the Netherlands. Cooperation with a major partner from the VME association was started here at the beginning of 2016.

AsiaThe main emphasis in the Asian region will still be on pushing the project business in 2016. The main markets here are China, Taiwan and Korea. Through stronger local support and establishing direct relations with developers, the conversion rate of projects should be increased to 50% in the medium-term. In parallel to this, projects are systematically inspected, thereby significant-ly increasing the number of offers which in turn leads to a higher completion quota.

In addition, the retail network is being expanded in the Chinese market, thereby further improving market penetration. This means we are also taking account of changing market conditions (supplementing the project business with retail business) in our strategic alignment.



ALNO UK foreign subsidiaryThe restructuring of the ALNO UK foreign subsidiary in the last three years led to growth of 43% in 2015. The key drivers of this growth were investments in project business, the expansion of the franchise business by rolling out an aggressive store opening programme and the expansion of the retail business through the profiling as a brand ambassador with the John Lewis chain of stores as well as three new studios.

The good positioning of ALNO UK means that continuing significant growth is planned for the strategic planning period up to 2020.

ALNO (Schweiz) AG foreign subsidiaryThe ALNO (Schweiz) AG foreign subsidiary achieved growth of 54% in 2015 by focusing on further expansion of market activities with active sales promotion and development of customer relationships with architects and planners in particular. Growth of similar magnitude is expected for 2016.

ALNO USA foreign subsidiaryGrowth of 81% was achieved in 2015 by continuously working on the existing sales channels of Retail, Trade and Project business.

In addition to working on existing sales channels, the network of retailers is to be strategically expanded and important sites occupied in 2016.

The retail business in Miami and New York continues to be expanded through in-house business. Growth of similar magnitude is expected for 2016.

Additional marketsThe focus here is on expanding the retail business. The main markets are Turkey, the Middle East and, in Europe, Italy and Poland.

The Turkish market in particular offers numerous possi-bilities for the project and retail business. The strategy with the local partner has been being implemented since 2015. In 2015, new ALNO studios were opened by retail-ers in Istanbul, Antalya and Ankara.

ALNOINOXThe export strategy will be implemented with a person directly responsible for exports. The objective for 2016 is to expand an international trading network with selected partners, work on which has already started. The first retailers in Germany, Russia and Asia were supplied with model kitchens in 2015. Also, the foreign subsidiaries have started work on the implementation.

4.3.2 Potential in Germany

Germany is viewed as having the following potential:

Expansion of the project businessThe in-house department under the direction of a new manager was set up for this purpose and will start work in April 2016. This is of great significance particularly in view of the positive developments in the construction of residential space for personal use and the current migra-tion situation in Germany.

Purchasing associationsBecause the cooperation with purchasing associations and cooperative ventures in Germany is not sufficiently equal, the company will continue to make more effort to work the market more effectively through the key account management.

Expansion own brandsThe development of additional own brands and the expansion of existing own brand concepts together with important sales partner represent an effective means in this connection of securing customer relations long term. This will also guarantee utilisation of production sites. Forward-looking developments to increase the appeal of our products will be implemented in 2016 for the very successful own brands ALTANO and CULINEO.

Improvements to the training schemeThe addition of online training to our ALNO Campus train-ing scheme opens up an entirely new option for ALNO AG to respond to the training needs of our marketing part-ners more rapidly, more individually and more efficiently and to create appropriate training programmes. The traditional training programmes offered by ALNO AG will not be abandoned but will be supplemented by online training when this makes sense.


5.5 gridWe expect the 72 cm tall carcase to be introduced successfully at ALNO in 2016. The market has responded very positively to this product since its presentation at MOW in the autumn. Initial figures for orders received confirm that this addition to the assortment is actually what the market wants.

4.3.3 Financing potential

The capital market and restructuring measures under-taken in 2012 allowed significant bank liabilities to be repaid, thereby releasing up the majority of collateral which had been placed. This free collateral currently has a total value in the triple-digit millions and is essentially available for new financing. On this basis, the ALNO Group is well placed to expand its financing.

4.3.4 Processes

The restructuring project started at the end of 2014 with the objectives of making production more flexible between Enger and Pfullendorf and centralising the administrative and support areas of the ALNO Group will contribute to a sustained improvement in the net assets, financial position and results of operations of the ALNO Group in 2016.

The new process concept will make it easier for customers to do business with the ALNO Group in future. There is one central point of contact in the sales unit for the customers, who is responsible for maintaining customer contact. By strengthening customer loyalty at the same time as streamlining processes, there will also be the side effect of significantly reducing structural costs as well as additional opportunities to improve the quality of revenues through a comprehensive consideration of customers.

This effect will be strengthened further in that delivery to customers will in future be from the plants in an opti-mised way.

The breakdown of the rigid allocation of brand to plant means that several brands will be produced in one plant in future. This will lead to increased flexibility of capacity utilisation between the plants, as well as reducing addi-tional costs and thus increasing efficiency in production.

4.3.5 Quality

The ALNO Group consistently works to improve quality further. Thus, defect ratios for customers will also be reduced further in 2016 by considering the entire wealth-creation chain from customer back to supplier, as a means of building further on our existing top position in the German kitchen market.

Since 2015, quality improvement projects with retailers as well as training for salespersons in furniture stores and our own field force have provided a means of reducing complaints and the costs that arise from them. The same applies to consistent quality audits at suppliers, with the possibility of more targeted regress.

4.3.6 Product innovations

Innovative product developmentsThe ALNO Group has won and regularly wins distinctions for its innovative product developments and designs and intends to do so in the future, too. Product development focuses on product innovations and new applications which are systematically developed across all product lines for specific target groups. The range of products and services will continuously be revised in the future, too.

New PINO type codeThe new type code at PINO, which was introduced to reduce the work involved in the planning process for retailers parallel to the existing type code at PINO, is providing very popular two months after its introduction. Two months after introduction, the level of use stands at 48%. This means that 48% of retail planners already using the new type code when preparing their plans two months after it was introduced.

Introduction of the 5.5 grid at ALNOThe introduction of the 5.5 grid for the ALNO brand has increased sales of the ALNO brand by 10% within two months without leading to any cannibalisation effects.



Introduction of the 6 grid for the ALTANO and CULINEO private label brandsThe introduction of the 78 cm high carcase for the ALTANO and CULINEO private brands was positively received by the market.

The potential resulting from the aforementioned oppor-tunities are the subject of corporate planning.

5 SIGNIFICANT FEATURES

of the accounting-related internal control and

risk management system pursuant to Sections

289 subsection 5 and 315 subsection 2, no. 5,

of the German Commercial Code (HGB)

According to the reasoning of the German Act to Moder-nise Accounting Law (BilMoG) which came into force on 29 May 2009, the internal system of controls encom-passes principles, methods and measures to assure the effectiveness and cost-efficiency of accounting, to assure the due and proper nature of the accounting and to ensure compliance with the relevant legal regulations. This also includes Group controlling insofar as it relates to the accounting. As part of the internal system of controls and like the latter, the risk management system in conjunction with the accounting process refers to processes controlling and monitoring the accounting, especially in the case of items in the commercial account which serve to hedge the company’s risks.

Presentation and explanation of the main features of the internal system of controls and of the risk manage-ment system in conjunction with the accounting process

The main features of the internal system of controls and risk management system used by ALNO AG can be described as follows in conjunction with the (Group) accounting process:

The ALNO Group is characterised by a clear organisa-tional, corporate, controlling and monitoring structure;

Coordinated planning, reporting, controlling and early warning systems and processes are in place through-out the Group to ensure all-embracing analysis and management of risk factors affecting earnings, as well as of risks jeopardising the company’s survival;

Functions are clearly assigned in all areas of the accounting process (e.g. financial accounting and controlling);

The computer systems used in accounting are protec-ted against unauthorised access;

Standard software is predominantly used in conjunc-tion with the financial systems used;

An adequate internal system of guidelines (including Group-wide risk management guidelines) is in place and is adjusted when necessary;

The departments involved in the accounting process meet with the quantitative and qualitative requirements;

The complete and correct nature of data in the accounting system is regularly verified with the aid of spot checks and plausibility checks, using both manual controls and the installed software. On the segment level, a risk controller is established to accompany the risk management process on the segment level and to verify the plausibility of the data;

For the consolidation, ALNO AG has set up processes to reconcile intra-Group receivables and liabilities, as well as income and expenses;

External services (e.g. actuaries, experts, etc.) are consulted in the case of essential, complex and dis-cretionary accounting issues;

Essential processes relating to the accounting are subjected to regular analytical checks;


The double-checking principle is consistently applied in all accounting-related processes;

Accounting-related processes are checked by Group controlling;

Among other things, the Supervisory Board also addresses essential issues concerning the accounting, risk management, the audit mandate and its main aspects.

In conjunction with the accounting process, the internal system of controls and risk management as well as internal audit assist the Board of Management and Super visory Board in ensuring compliance with the statutory regulations.

6 REPORTING in accordance with to Sections 289 subsection 4

and 315 subsection 4 of the German Commercial

Code (HGB)

As the ALNO Group’s parent, ALNO AG uses an organ-ised market within the meaning of Section 2 subsection 7 of the German Securities Acquisition and Takeover Act (WpÜG) for its issued voting shares and therefore reports in accordance with Sections 289 subsection 4 and 315 subsection 4 of the German Commercial Code (HGB).

Composition of the subscribed capital

The subscribed capital is unchanged in total at € 75,594,979.00 as at 31 December 2015 and is divided into 75,594,979 no-par-value shares. The shares are issued as bearer shares and fully paid up.

Restrictions on voting rights or the transfer of shares

The Board of Management does not know of any restric-tions on voting rights or the transfer of shares, even when they may be associated with agreements between share-holders. Each share grants one vote in accordance with Article 22 of the articles of association.

Direct or indirect equity interests

For holdings of more than 10% of the capital in ALNO AG, the equity interests applicable as at 31 December 2015 are summarised below on the basis of the last figures reported to ALNO AG in accordance with the German Securities Trading Act (WpHG):

Holders of shares with special rights

There are no shares with special rights authorising control.

Type of voting control in the case of employee holdings

The Board of Management does not know of any voting control in the event that employees hold a share of the capital and do not exercise their right of control directly.

Statutory regulations and provisions in the articles of association concerning the appointment and dismissal of members of the Board of Management and amend-ments to the articles of association

Members of the Board of Management are appointed and dismissed in accordance with Section 84 of the Stock Corporation Act (AktG). Amendments to the articles of association are decided by the annual gener-al meeting in accordance with Sections 133 and 179 of the Stock Corporation Act (AktG). In Section 12 subsec-tion 2 in combination with Section 12 subsection 1 of the articles of association, the annual general meeting has exercised the option pursuant to Section 179 subsec-tion 1, sentence 2, of the Stock Corporation Act (AktG) and authorised the Supervisory Board to undertake changes which merely concern the version of the articles of association.

Affiliated companyShare of

voting rightsNotification /

publication date

Whirlpool Germany GmbH, Stuttgart 1) 14.08%

25 November / 27 November 2015

Whirlpool Corporation, Wilmington, DE / USA 1) 14.08%

25 November / 27 November 2015

1) Pursuant to Section 22 subsection 1, sentence 1, no. 1, para. 3 of the Securities Trading Act (WpHG), the 14.08% voting rights held by Whirlpool Germany GmbH are ascribed to Whirlpool Corporation.


Forecast, risk and opportunity reportSignificant featuresReporting

Power of the Board of Management to issue and buy back shares

By resolution of the ordinary general meeting of ALNO AG on 2 June 2015, the Board of Management was author-ised with the consent of the Supervisory Board to increase the company’s share capital once or several times until 1 June 2020 by up to € 37,797,489.00 through issuing up to 37,797,489 new no-par-value bearer shares in return for cash and / or non-cash contributions (author-ised capital 2015). The Board of Management was authorised, with the consent of the Supervisory Board, to specify further details of the share rights, the condi-tions for issuing shares and for the realisation of this capital increase. The shareholders can exercise their statutory subscription right. The new shares can also be acquired by a single credit institute or several credit in-stitutes or companies within the meaning of Section 186(5) Sentence 1 of the German Stock Corporations Act (AktG) with the obligation to offer them to share-holders for purchase (indirect stock options).

However, the Board of Management was authorised, with the consent of the Supervisory Board, to exclude the statutory subscription right of shareholders under the following circumstances:

for fractional amounts;

in capital increases in return for cash contributions up to an amount not exceeding 10% of the share capital at the time when this authority comes into effect or, if the share capital is lower at that time, when this authority is exercised, if the issue price of the new shares is not significantly below the market price of the correspondingly endowed shares already listed on the stock market within the meaning of Section 203 sub-section 1, sentence 1 and subsection 2 in conjunction with Section 186, subsection 3, sentence 4 of the Stock Corporation Act (AktG). The aforementioned 10% limit shall apply to shares that are purchased on the basis of an authority from the ordinary general meeting and are sold in accordance with Section 71 subsection 1, no. 8, sentence 5 of the Stock Corporation Act (AktG) in conjunction with Section 186, subsection 3, sentence 4 AktG during the term of this authority. Fur-thermore, this limit applies to those shares that are to be issued in order to service bonds with option or con-version rights or obligations, if the bonds are issued with corresponding use of Section 186 (3), Sentence 4 AktG with shareholders’ subscription rights excluded;

in capital increases in return for non-cash contribu-tions, to guarantee new shares for the purpose of direct or indirect acquisition of companies, parts thereof or investing in companies and other assets, including loans and other liabilities;

to the extent that it is necessary, to grant the owners or creditors of bonds with option or conversion rights or obligations issued by the company or its subordinate Group companies a subscription right to new shares commensurate with that accruing after exercising their option or conversion rights or following the discharge of the option or conversion obligations.

The authorised capital 2015 was entered in the Register of Companies on 2 July 2015.

The authorised capital 2015 was not utilised as at 31 De-cember 2015, and thus remained € 37,797,489.00.

The annual general meeting on 26 June 2013 authorised the Board of Management to issue cum-warrant and / or convertible bonds, participatory rights and / or participat-ing bonds (or combinations of these instruments) (referred to jointly as “bonds”) in the total amount of up to € 100,000,000.00 up to 25 June 2018, and has created conditional capital in the amount of € 35,047,489.00 (conditional capital 2013) for this purpose. The aforemen-tioned authorisation from 26 June 2013 was used in March 2014 by the issue of convertible bonds in the total amount of € 14,000,000.00 (“convertible bond 2014”). In view of the conversion price defined in the bond condi-tions of the convertible bond 2014 amounting to € 2.00 per share, the conditional capital 2013 must be maintained in an amount of € 7,000,000.00 to secure the holders of the convertible bond 2014 and the authori-sation of 26 June 2013 (corresponding to 7,000,000 no-par-value ordinary shares of the company with a pro rata amount of the capital stock of € 1.00 per share).

The remaining framework for the conditional capital 2013 has been opened for an amount of € 21,000,000.00 for further conversion and subscription rights which can be issued on the basis of the new authorisation by the annual general meeting on 28 May 2014, up to 27 May 2019. Accordingly, the decision taken by the annual general meeting on 26 June 2013 regarding the creation of the conditional capital 2013 (taking account of the reduction in the conditional capital 2013 described be-low) was readapted to such an extent that the con ditional capital 2013 is also available for safeguarding the holders


of cum-warrant and / or convertible bonds, participatory rights and / or participating bonds (or combinations of these instruments) which are issued on the basis of the authorisation approved by the annual general meeting on 28 May 2014.

The adjusted conditional capital 2013 was entered in the Register of Companies on 28 July 2014 and was newly specified as follows: The capital stock has been condi-tionally increased up to € 28,037,993.00 by the issue of up to 28,037,993 no-par-value ordinary shares (condi-tional capital 2013). The conditional capital increase will only be undertaken to such an extent as the holders or creditors of cum-warrant and / or convertible bonds, participating bonds and / or participatory right with cum-warrant and / or conversion rights or option and conversion obligations (or combinations of these instru-ments) that the company or its Group companies issued in March 2014 on the basis of the authorisation decision by the annual general meeting on 26 June 2013, or will be issued up to 27 May 2019 according to the authori-sation of the annual general meeting on 28 May 2014, exercise their option or conversion rights deriving from these bonds or discharge their conversion / option obligation, and in each of these cases to the extent that the conditional capital 2013 is required according to the provisions of the bond terms. The new shares are issued in accordance with the aforementioned authorisation decisions at a specific option or conversion price in each case. The new shares participate in profits from the start of the financial year in which no decision has been taken regarding the use of the net profit at the time when they were issued. The Board of Management is authorised to specify further details, with the consent of the Super-visory Board, concerning the realisation of this condi-tional capital increase.

Furthermore, the annual general meeting of ALNO AG on 28 May 2014 decided on authorising the issue of up to 7,009,496 share options to members of the Board of Management of the company, selected managers be-low Board of Management level in the company as well as members of the managing boards of companies asso-ciated with the company, in accordance with Sections 15 ff. of the Stock Corporation Act (AktG). The no-par-value bearer shares of the company, in up to 7,009,496 in number, required for fulfilling the share option rights will be granted by a conditional capital 2014. To create the conditional capital 2014, the existing conditional cap-ital 2013 was reduced by € 7,009,496.00 to the amount of € 28,037,993.00. The reduction in the conditional

capital 2013 was required because the nominal amount of the conditional capital was not allowed to exceed half of the capital stock on hand at the time when the decision regarding the conditional capital increase was taken. Also, following the reduction in the conditional capital 2013, the subscription rights of the holders of the con-vertible bond 2014 are fully covered.

The annual general meeting of ALNO AG on 28 May 2014 therefore decided to increase conditionally the capital stock by up to € 7,009,496 by issuing up to 7,009,496 no-par-value ordinary shares (conditional capital 2014). The conditional capital increase exclusively serves to grant rights to the holders of share option rights from the share option programme 2014, which the Board of Man-agement was authorised to issue by a decision of the annual general meeting on 28 May 2014. The condition-al capital increase will only be undertaken to the extent that the holders of share option rights granted on the basis of the authorisation by the annual general meeting on 28 May 2014 exercise these option rights and the company does not fulfil the share option rights through cash payment. The new shares participate in profits from the start of the financial year in which no decision has been taken by the Annual General Meeting regarding the use of the net profit at the time when they were issued. The Board of Management of ALNO AG is entitled to define the further details for undertaking the conditional capital increase, with the approval of the Supervisory Board, in the event that share option rights and shares are to be issued to members of the Board of Manage-ment of the company; in this case, the Supervisory Board defines the further details for carrying out the condition-al capital increase. It was entered in the Register of Com-panies on 28 July 2014.

The ordinary general meeting of ALNO AG on 2 June 2015 approved an increase in the conditional capital 2013 from € 28,037,993.00 to € 30,787,993.00. The increase in the conditional capital 2013 was entered in the Re-gister of Companies on 2 July 2015. The increase in the conditional capital 2013 was made possible by the increase in the share capital decided by the Board of Management on 30 March 2015 with the consent of the Supervisory Board.


Reporting

To this extent, the remaining framework for the condi-tional capital 2013 was opened for an amount of € 23,787,993.00 for further conversion and subscription rights which can be issued on the basis of the following authorisation up to 1 June 2020.

By resolution of the ordinary general meeting of ALNO AG on 2 June 2015, the authorisation given to the Board of Management on 28 May 2014 to issue cum-warrant and / or convertible bonds, participatory rights and / or participating bonds was cancelled.

By decision of the ordinary general meeting of ALNO AG on 2 June 2015, the Board of Management was author-ised to issue, once or several times until 1 June 2020, cum-warrant and / or convertible bonds, participatory notes and / or participating bonds (or combinations of these instruments) in the total amount of up to € 90,000,000.00 with or without limitation of maturities, and to grant the owners or creditors of the bonds option or conversion rights (also with conversion or option ob-ligation) to a total of 23,787,993 no-par-value ordinary shares of the com pany with a pro rata amount of the capital stock of up to € 23,787,993.00 in accordance with the more detailed provisions of the bond terms. The bonds can be issued in euros or – subject to limitation to the corresponding equi valent value – another legal foreign currency, such as that of an OECD country. They can also be issued by companies based within and out-side Germany in which the company holds a direct or indirect majority stake. In this case, the Board of Man-agement is entitled to take over the guarantee for the bonds on behalf of the company, and to grant the own-ers of such bonds option or conversion rights (also with conversion or option obligation) for no-par-value ordinary shares of the company.

According to a resolution on 2 June 2015, the Board of Management was authorised according to Section 71, subsection 1, no. 8 of the Stock Corporation Act (AktG) to purchase the company’s shares for any permitted purpose within the limits of statutory restrictions and in line with the following provisions, in the amount up to 10% of the company’s share capital at the time when the resolution was taken by the annual general meeting or – if this value is lower – of the company’s share capital at the time when the aforementioned authorisation is exer-cised. The authorisation is issued subject to the proviso that the shares purchased on the basis of this authori-sation, taken together with other shares of the company that the company has already purchased and still owns

or which are to be attributed to the company according to Sections 71d and 71e AktG, shall never exceed the calculated amount of 10% of the share capital in ques-tion. The authorisation may be exercised in whole or in part, on one or more occasions, individually or collec-tively by the company or by companies subordinate to it as defined by Section 17 AktG or by third parties author-ised by the company or by companies subordinate to it as defined by Section 17 AktG. This authorisation remains valid until 1 June 2020.

Major changes subject to a change of control following a takeover bid

There were no such agreements as at the closing date.

Compensation agreements

Compensation agreements which would apply in the event of a takeover agreement have not been concluded between the company and members of the Board of Management or employees.

7 DECLARATION ON CORPORATE GOVERNANCE

(Section 289a of the German Commercial Code

(HGB)) and report on corporate governance

Declaration pursuant to Section 161 of the Stock Corporation Act (AktG)

Corporate governance stands for responsible, trans-parent and orderly management and control of com panies. The purpose of the German Corporate Governance Code (hereinafter referred to as “the Code”) is to ensure that the rules accepted in Germany for managing and controlling companies are standardised for national and international investors and systemati cally implemented to strengthen confidence in the manage-ment of German companies. Section 161 of the Stock Corporation Act (AktG) obliges listed companies to declare every year that the company has been, and is, in compliance with the recommendations or to advise of any recommendations that have not been, or are not being, applied and the reasons for this.


The Board of Management and Supervisory Board of ALNO AG explicitly welcome the Code’s recommen-dations and their objectives. Both boards have once again devoted intensive attention to the Code’s recom-mendations and their implementation this year and com-plied with these recommendations with only a few ex-ceptions. The joint declaration of compliance by the Board of Management and Supervisory Board is set out below and is also publicly accessible on the Internet at www.alno.ag.

Declaration pursuant to Section 161 of the Stock Corporation Act (AktG) by the Board of Management and Super-visory Board of ALNO AG concerning the recommendations of the German Corporate Governance Code:

The Board of Management and Supervisory Board of ALNO AG issued the last declaration of compliance on 25 September 2014, updated on 14 April 2015. This referred to the German Corporate Governance Code, as amended on 13 May 2013 (published on 10 June 2013 in the Federal Gazette). ALNO AG has complied with all recommendations of the German Corporate Governance Code with the following exceptions:

The German Corporate Governance Code recom-mends D&O insurance with deductible for members of the Supervisory Board. ALNO AG believes that a deductible is not required in view of the Supervisory Board members’ responsibility and motivation in discharging their duties. Contrary to the require-ments in Section 3.8 of the Code, the D&O insurance in force for members of the Supervisory Board of ALNO AG therefore does not include a deductible.

The interim report was not and will not be published within 45 days of the end of the reporting period (Section 7.1.2 of the Code, sentence 3). It is planned to bring the interim report more into line with the required deadlines.

The Supervisory Board defined specific objectives with regard to its membership in its meeting on 25 September 2014. These objectives for its mem-bership are not currently set out in the Corporate Governance Report 2014 but will be published and made accessible in a separate document on the website of ALNO AG. Contrary to the requirements of Section 5.4.1 subsection 3 sentence 2 of the Code, the objectives for the membership of the Super visory

Board are therefore presented transparently. ALNO AG will comply with the recommendation of the Code in future and report on both the specific objectives for the membership of the Supervisory Board and their implementation in the report on corporate governance.

The Board of Management and Supervisory Board also declare that all recommendations of the German Cor-porate Governance Code in the new version dated 5 May 2015 (published on 12 June 2015 in the Federal Gazette) are complied with, with the following exceptions:

The German Corporate Governance Code recom-mends D&O insurance with a deductible for mem-bers of the Supervisory Board. ALNO AG believes that a deductible is not required in view of the Supervisory Board members’ responsibility and motivation in discharging their duties. Contrary to the requirements in Section 3.8 of the Code, the D&O insurance in force for members of the Supervisory Board of ALNO AG therefore does not include a deductible.

The interim report was not and will not be published within 45 days of the end of the reporting period (Section 7.1.2 of the Code, sentence 3). It is planned to bring the interim report more into line with the required deadline.

The Supervisory Board has not set a regulatory limit for membership of the Supervisory Board and there-fore does not comply with the recommendation in Section 5.4.1 subsection 2 sentence 1 of the Code. ALNO AG is of the opinion that suitability for mem-bership of the Supervisory Board is solely dependent on the respective needs of the company and the individual abilities of the Supervisory Board mem-bers. We do not consider definition of regulatory limit for the length of membership of the Super visory Board is advisable, since the company should also be able to access the expertise of experienced Supervisory Board members

Pfullendorf, 1 October 2015

For the For theBoard of Management Supervisory BoardMax Müller Hanns R. Rech


ReportingDeclaration on corporate governance

Relevant disclosures concerning management duties and activities which go beyond the statutory requirements

Mission statement of ALNO AG

It is the declared aim of ALNO AG to undertake all busi-ness dealings in an ethically and legally irreproachable manner. On the basis of its “one company” concept, ALNO AG has developed a mission statement which sets out the basis of its corporate culture for employees and partners, represents the company’s corporate identity and describes the principles for sustainable and socially responsible action.

Group guidelines on conduct in business life

ALNO AG has adopted internal Group guidelines defining its conduct in business life. For all employees of the ALNO Group (including the executive management level and Board of Management), these guidelines not only specify basic behavioural requirements, but also define relations with business partners and third parties, the use of company facilities and the use of data. In addition, the Group guidelines also address such issues as the environment, occupational safety and health, and the right to make complaints and receive information. Com-pliance with the Group guidelines on conduct in business life is regularly checked in all the Group’s companies. This is undertaken in compliance with the respective national procedures and statutory requirements.

Transparency and accounting

ALNO AG prepares regular annual and interim reports, ad-hoc bulletins and press releases for its shareholders and the interested public, informing them of the com-pany’s position and essential changes in its business operations. The corporate information published by the company is also posted on the company’s website and is publicly accessible on www.alno.ag.

Duties and activities of the Board of Management and Supervisory Board; membership, duties and activities of the Supervisory Board’s committees


On 31 December 2015, the Board of Management of ALNO AG was made up of two members. The Board of Management runs the company on its own responsi bility. It is bound by the company’s interests and committed to sustainably increasing the company’s enterprise value. The members of the Board of Management are appointed by the Supervisory Board. The precise number of mem-bers making up the Board of Management and, if neces-sary, its chairman and the chairman’s deputy are likewise designated by the Supervisory Board.

According to the articles of association of ALNO AG, the Board of Management must draw up rules of procedure in consultation with the Supervisory Board. These rules of procedure define management of the business as a whole and of individual business areas, the allocation of duties, the duties of the Chief Executive Officer, the board’s duties as regards informing the Supervisory Board and the manner in which it deals with conflicts of interest. The Board of Management meets regularly at short intervals to discuss the development of business and adopt its resolutions. In addition, the Board of Management regularly reports to the Supervisory Board, with timely and comprehensive information on all aspects of net assets, the financial position and results of oper-ations of relevance to the company, its planning, business development, ongoing projects, risk position and risk management, and coordinates the company’s strategic orientation with the Supervisory Board.

Total remuneration for the members of the Board of Man-agement is in compliance with the statutory requirements of the Stock Corporation Act (AktG). The members of the Board of Management receive a fixed remuneration which also includes non-cash elements, especially the provision of a company car. The fixed elements assure a basic level of remuneration allowing each member of the Board of Management to perform his or her duties in accordance with the company’s well-understood interests and the obligations of a prudent business person, without becoming dependent on the achievement of merely short-term targets. In addition, their service contracts also include a variable premium element which depends on the company’s economic performance.


Information on the basic principles of the system of remuneration for the Board of Management as well as disclosure of the remuneration of the Board of Manage-ment can be found in the remuneration report. For the remuneration report, we refer to the detailed disclosures in the remuneration report in the Group Notes.

The Supervisory Board

The Supervisory Board of ALNO AG monitors and advises the Board of Management in its running of the company and participates in decisions of fundamental importance for the company. As required by the German One-Third Participation Act (DrittelbG), the Supervisory Board of ALNO AG comprises six shareholder represent-atives and three employee representatives. From 1 No-vember 2014 until 20 January 2015, the Supervisory Board consisted of five representatives of the sharehold-ers and three representatives of the employees. Since 21 January 2015, the Supervisory Board has again consisted of six representatives of the shareholders and three representatives of the employees.

The Supervisory Board is also required by the articles of association to draw up its own rules of procedure. These govern, in particular, the convocation of meetings, the formation and duties of the committees and the require-ments to be met by the members of the Supervisory Board. The Supervisory Board meets at least twice per half-year. The chairman of the Supervisory Board de-cides whether the members of the Board of Management are to attend its meetings. Meetings are convened with at least 14 days’ notice. The agenda topics and proposed resolutions are communicated together with the invita-tion. In individual cases, the Supervisory Board also adopts resolutions in a written circulating procedure or through telephone conferences. The Supervisory Board does not include any former members of the company’s Board of Management.

Each member of the Supervisory Board is obliged to disclose any conflicts of interest immediately. Members of the Supervisory Board are required to resign their position in the event of significant and not merely temporary personal conflicting interests.

The chairman of the Supervisory Board remains in regular contact with the Board of Management and par-ticularly with the Chief Executive Officer, with whom the chairman consults on the company’s strategy, business

development, planning, risk position, compliance and risk management.

In the report of the Supervisory Board and at the annual general meeting, the chairman of the Supervisory Board gives a detailed annual report on the activities of the Supervisory Board and its committees.

The Supervisory Board has set up the following three committees: Strategy and Executive Committee, Audit Committee and Nomination Committee.

The Strategy and Executive Committee prepares the meetings of the Supervisory Board and monitors the resolutions adopted. It prepares the conclusion, amend-ment and termination of employment contracts with the members of the Board of Management as well as the total remuneration of the individual members of the Board of Management and the structure of the system of remu-neration for the Board of Management for decisions by the Supervisory Board. It represents the company in dealings with former members of the Board of Manage-ment, insofar as this is not the responsibility of the Board of Management. In addition, the Strategy and Executive Committee analyses the company’s ongoing business, advises the Board of Management with regard to the strategic orientation of the ALNO Group and Group com-panies, verifies its implementation and prepares papers on the strategic orientation to be adopted by the Super-visory Board, insofar as the activity concerned requires the consent of the Supervisory Board.

The Strategy and Executive Committee comprised or comprises the following members:

Mr Henning Giesecke (chairman and member up to 2 June 2015)

Mr Hanns R. Rech (chairman and member from 2 June 2015)

Mr Hubertus Krossa

Mr Norbert Orth


Declaration on corporate governance

The Audit Committee is mainly concerned with monitor-ing the accounting process, the effectiveness of the internal control system, the risk management system, the internal audit system, the audit of the annual financial statements and compliance, the necessary independ-ence of the auditors, retaining the auditors, defining the focal points of the audit and reaching agreement with the auditors on their fee for the audit.

As an independent member of the Supervisory Board with expert knowledge of accounting and the auditing of financial statements within the meaning of Section 100 subsection 5 of the Stock Corporation Act (AktG), Mr Anton Walther is the chairman of the Audit Committee.

The Audit Committee comprised or comprises the following members:

Mr Anton Walther (chairman)

Mr Henning Giesecke (from 2 June 2015)

Mr Jörg Kespohl (up to 2 June 2015)

Mr Hubertus Krossa (up to 29 January 2015)

Mr Hanns R. Rech (from 29 January 2015 up to 2 June 2015)

Mr Christian Schwengel (from 2 June 2015)

The Nomination Committee has the task of proposing suitable candidates to Supervisory Board for it to recommend for election by the annual general meeting as shareholders’ representatives in the Supervisory Board. In addition to the requisite knowledge, skills and professional experience of the candidates, the targets specified by the Board of Supervisory in its Rules of Procedure should also be taken into account in the recommendations.

The Nomination Committee comprised or comprises the following members:

Mr Henning Giesecke (chairman up to 2 June 2015, member from 2 June 2015)

Mr Hanns R. Rech (chairman and member from 2 June 2015)

Mr Norbert Orth

Mr Hubertus Krossa (up to 2 June 2015)

Further information on the members of the Board of Management and Supervisory Board and on the remu-neration paid to the Board of Management can be found in Section J. “Supervisory Board and Board of Manage-ment” of the notes to this annual report.

For their activities, the members of the Supervisory Board received total remuneration in the amount of € 480,000.00 in the financial year 2015. This is made up as follows:

2015 in €

Henning GieseckeChairman up to 2 June 2015 70.833

Hanns RechChairman from 2 June 2015 76.667

Rudolf Wisser(Vice-Chairman up to 2 June 2015) 25.000

Waltraud Klaiber(Vice-Chairman from 2 June 2015) 35.000

Jörg Kespohl(up to 2 June 2015) 18.750

Hubertus Krossa 47.500

Gerhard Meyer(up to 30 September 2015) 30.000

Dagmar Heine(from 1 October 2015) 10.000

Norbert Orth 50.000

Werner Rellstab 40.000

Christian Schwengel 26.250

Anton Walther 50.000

TOTAL 480.000


The employees’ representatives also received remuner-ation of € 165,879 (previous year: € 179,325).

The fees paid to members of the Supervisory Board for their advisory activities are set out in Section J. “Super-visory Board and Board of Management” of the notes to this annual report.

As at 31 December 2015, the Chief Executive Officer Max Müller and his family directly and indirectly held 5,030,000 shares in the company, corresponding to 6.65% of the share capital of ALNO AG. All other members of the Board of Management held fewer than 1% of the shares in ALNO AG both at the end of 2015 and at the end of the previous year 2014. In total, the members of the Board of Management and their families held 5,280,000 shares on 31 December 2015. The members of the Supervisory Board held 292,300 shares in total on 31 December 2015.

Definition of targets for a gender quota for the Supervisory Board and Board of Management

In compliance with the requirements of the law on the equal participation of men and women in management roles in private industry and in the public sector, which came into force on 1 May 2015, the Supervisory Board of ALNO AG has set the proportion of women amongst its own members of the Supervisory Board at 20% by 30 June 2017. Following this definition, the proportion of women in the Supervisory Board has already exceeded the threshold of 20%.

As far as membership of the Board of Management is concerned, the Supervisory Board has set a mandatory target for equal participation of women and men to the effect that the proportion of women in the Board of Man-agement of ALNO AG should be 20%. This objective is also to be met by 30 June 2017. The proportion of women in the Board of Management of ALNO AG is currently over 20%.

In accordance with Section 76 subsection 4 of the Stock Corporation Act (AktG), the Board of Management has specified a target of 20% for equal participation of men and women when filling management roles for both the 1st and 2nd level below the Board of Management. The proportion of women in the 1st and 2nd level below the Board of Management is currently over 12%.

Further information on the company’s management can be found in the articles of association of ALNO AG, which are also publicly accessible on the company’s website at www.alno.ag.



Max MüllerChief Executive Officer of ALNO AG

Ipek DemirtasChief Financial Officer


Declaration on corporate governance

03CONSOLIDATED FINANCIAL STATEMENTS

74 Consolidated income statement

75 Consolidated statement of comprehensive income

76 Consolidated balance sheet

78 Consolidated cash flow statement

80 Consolidated statement of changes in equity

in € 000 Group Notes 2015 2014

Sales revenue C. 1 521,505 545,774

Changes in inventories and capitalised goods and services for own account C. 2 −3,285 593

Other operating income C. 3 58,200 78,217

Total operating performance 576,420 624,584

Cost of materials C. 4 291,787 316,242

Personnel expenses C. 5 136,429 138,253

Other operating expenses C. 6 119,918 121,207

Restructuring result (+ = expense / − = revenue) C. 7 13,515 8,925

EBITDA 14,771 39,957

Depreciation on intangible assets and property, plant and equipment C. 8 26,232 33,710

OPERATING PROFIT −11,461 6,247

Income from investments measured at equity C. 9 / D. 4 −483 −2,946

Financial income C. 9 337 2,656

Financial expenses C. 9 12,826 12,265


RESULT BEFORE INCOME TAXES −24,433 −6,308

Income taxes (+ = expense / − = revenue) C. 10 −20,047 −2,187

GROUP PROFIT FOR THE PERIOD −4,386 −4,121

of which non-controlling interests −92 −133

of which attributable to shareholders of ALNO AG −4,294 −3,988

Profit in EUR / share (diluted and undiluted) P. −0.06 −0.06

CONSOLIDATED INCOME STATEMENTof ALNO Aktiengesellschaft, Pfullendorf, for the period from 1 January to 31 December 2015



GROUP PROFIT FOR THE PERIOD −4,386 −4,121

Items transferred to the income statement in subsequent periods:

Change in the difference resulting from currency conversion −907 175

Changes in the value of securities recognised outside profit or loss −8 −9

Deferred taxes on the change in value of securities recognised outside profit or loss C. 10 0 3

Total of items transferred to the income statement in subsequent periods: −915 169

Items not transferred to the income statement in subsequent periods:

Actuarial gains and losses from pension provisions D. 12 −1,868 −7,180

Deferred taxes on actuarial gains and losses from pension provisions C. 10 138 1,620

Change in scope of consolidation −1,456 0

Total of items not transferred to the income statement in subsequent periods: −3,186 −5,560

OTHER GROUP PROFIT FOR THE PERIOD −4,101 −5,391

GROUP OVERALL RESULT −8,487 −9,512

of which non-controlling interests −92 −133

of which attributable to shareholders of ALNO AG −8,395 −9,379

GROUP STATEMENT OF INCOME AND ACCUMULATED EARNINGSof ALNO Aktiengesellschaft, Pfullendorf, for the period from 1 January to 31 December 2015


Consolidated income statementGroup statement of income and accumulated earnings

in € 000 Group Notes31 December

201531 December

2014

ASSETS

Intangible assets D. 1 48,050 55,001

Property, plant and equipment D. 2 98,587 111,037

Financial investments D. 3 381 998

At equity investments D. 4 721 0

Financial accounts receivable D. 5 12,661 3,544

Deferred tax assets C. 10 18,347 1,620

Trade accounts receivable D. 6 978 725

Other assets D. 8 431 438

A. Non-current assets 180,156 173,363

Inventories D. 7 28,823 34,830

Financial accounts receivable D. 5 400 195

Trade accounts receivable D. 6 60,383 58,510

Other assets D. 8 11,876 9,773

Income tax refund entitlements C. 10 29 36

Liquid assets D. 9 4,844 2,270

Available-for-sale assets D. 10 3,620 5,569

B. Current assets 109,975 111,183

TOTAL ASSETS 290,131 284,546

CONSOLIDATED STATEMENT OF FINANCIAL POSITIONof ALNO Aktiengesellschaft, Pfullendorf, as at 31 December 2015


in € 000 Group Notes31 December

201531 December

2014

LIABILITIES

Subscribed capital D. 11. a 75,595 70,095

Capital reserve D. 11. b 3,533 3,258

Legal reserve D. 11. c 462 462

Accumulated net income D. 11. d −110,217 −101,822

Shareholders’ equity attributable to ALNO AG −30,627 −28,007

Non-controlling interest portion of equity 6 0

A. Equity −30,621 −28,007

Provisions for pensions D. 12 30,122 28,497

Deferred tax liabilities C. 10 725 5,303

Other provisions D. 13 432 935

Shareholder loans D. 14 41,625 20,000

Other financial liabilities D. 15 77,789 71,152

Deferred grants and subsidies from public authorities D. 16 653 679

Trade accounts payable and other financial liabilities D. 17 25,263 19,508

B. Non-current liabilities 176,609 146,074

Other provisions D. 13 8,098 8,361

Shareholder loans D. 14 1,500 10,000

Other financial liabilities D. 15 18,179 30,202

Trade accounts payable and other financial liabilities D. 17 98,897 102,945

Remaining other liabilities D. 18 17,021 14,591

Liabilities from income taxes C. 10 448 380

C. Current liabilities 144,143 166,479

TOTAL LIABILITIES 290,131 284,546


Consolidated statement of financial position

CONSOLIDATED CASH FLOW STATEMENTof ALNO Aktiengesellschaft, Pfullendorf, for the period from 1 January to 31 December 2015


Cash flow from operating activities

Group profit for the period −4,386 −4,121

Income taxes −20,047 −4,532

Financial result 12,972 12,555

Depreciation on intangible assets and property, plant and equipment 26,232 33,710

Retained income taxes 28 58

Paid income taxes −380 −94

Profit (previous year: loss) from disposal of property, plant and equipment and intangible assets −7,926 412

Interest received 28 321

Interest paid −10,473 −8,813

Elimination of non-cash items

Change in other provisions, the provisions for pensions and deferred investment grants from public funds 7,265 8,394

Other non-cash earnings / expenditure −20,904 −58,556

Cash-effective change in provisions −7,899 −4,937

Cash flow from operating activities before working capital changes −25,490 −25,603

Change in working capitals

Change in inventories 3,859 1,219

Change in accounts receivable trade and other assets −23,529 294

Change in trade accounts payable and other debts 16,636 39,246

Net cash and cash equivalents applied (previous year: received) for operating activities −28,524 15,156



Cash flow from investment activities

Outpayments for investments in

Intangible assets −3,399 −1,068

Property, plant and equipment −13,532 −15,516

Outpayments for company purchases −44 −37,007

Inpayments from the sale of subsidiaries less cash and cash equivalents sold 19,427 0

Inpayments from disposals

Property, plant and equipment 18,888 220

Financial investments 181 625

NET CASH AND CASH EQUIVALENTS RECEIVED (PREVIOUS YEAR: APPLIED) FOR INVESTMENT ACTIVITIES 21,521 −52,746

Cash flow from financing activities

New borrowings 11,132 43,908

Repayment of loans −8,173 −10,120

Change in current account and factoring liabilities 1,089 3,909

Inpayments from capital increases 5,775 0

Outpayments for financing costs −57 −1,111

NET CASH AND CASH EQUIVALENTS RECEIVED FOR FINANCING ACTIVITIES 9,766 36,586

Cash change in cash and cash equivalents 2,763 −1,004

Cash and cash equivalents at the start of the financial year 1,774 2,720

Changes in cash and cash equivalents due to exchange rate 96 58

CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL YEAR D. 9 4,633 1,774


Consolidated cash flow statement

CONSOLIDATED STATEMENT OF CHANGES IN EQUITYof ALNO Aktiengesellschaft, Pfullendorf, for the period from 1 January to 31 December 2015

in € 000 Subscribed capital Capital reserve Legal reserve

Accumulated net income

Shareholders’ equity attributable to

ALNO AG equity

Non-controlling interest portion

of equityGroup equity

capital

Other transactions not affecting net income

Generated Group equity

Reserve from foreign currency translation

Change in provision for pensions

Value change securities

Group Notes D. 11. a D. 11. b D. 11. c D. 11. d D. 11. d D. 11. d D. 11. d D. 11. d

1 January 2014 70,095 3,258 462 −87,638 −664 −3,986 −49 −18,522 141 −18,381

Group profit for the period −3,988 −3,988 −133 −4,121

Other Group profit for the period 175 −5,560 −6 −5,391 −5,391

Group overall result −3,988 175 −5,560 −6 −9,379 −133 −9,512

Change in scope of consolidation, unless contained in Group overall result −133 27 −106 −8 −114

31 December 2014 70,095 3,258 462 −91,759 −462 −9,546 −55 −28,007 0 −28,007


Other Group profit for the period −1,456 −907 −1,730 −8 −4,101 −4,101

Group overall result −5,750 −907 −1,730 −8 −8,395 −92 −8,487

Capital increase 5,500 275 5,775 5,775

Change in scope of consolidation, unless contained in Group overall result 98 98

31 DECEMBER 2015 75,595 3,533 462 −97,509 −1,369 −11,276 −63 −30,627 6 −30,621


in € 000 Subscribed capital Capital reserve Legal reserve

Accumulated net income

Shareholders’ equity attributable to

ALNO AG equity

Non-controlling interest portion

of equityGroup equity

capital

Other transactions not affecting net income

Generated Group equity

Reserve from foreign currency translation

Change in provision for pensions

Value change securities

Group Notes D. 11. a D. 11. b D. 11. c D. 11. d D. 11. d D. 11. d D. 11. d D. 11. d

1 January 2014 70,095 3,258 462 −87,638 −664 −3,986 −49 −18,522 141 −18,381


Other Group profit for the period 175 −5,560 −6 −5,391 −5,391

Group overall result −3,988 175 −5,560 −6 −9,379 −133 −9,512

Change in scope of consolidation, unless contained in Group overall result −133 27 −106 −8 −114

31 December 2014 70,095 3,258 462 −91,759 −462 −9,546 −55 −28,007 0 −28,007


Other Group profit for the period −1,456 −907 −1,730 −8 −4,101 −4,101

Group overall result −5,750 −907 −1,730 −8 −8,395 −92 −8,487

Capital increase 5,500 275 5,775 5,775

Change in scope of consolidation, unless contained in Group overall result 98 98

31 DECEMBER 2015 75,595 3,533 462 −97,509 −1,369 −11,276 −63 −30,627 6 −30,621


Consolidated statement of changes in equity

NOTES

84 Company purpose

84 Accounting policies

107 Notes to the consolidated income statement

114 Notes to the consolidated balance sheet

134 Notes to the consolidated cash flow statement

134 Notes on segment reporting

137 Management of financial risks

144 Contingencies and other financial obligations

145 Related persons and companies

148 Supervisory Board and Board of Management

156 Companies utilising the exemption pursuant to Section 264 subsection 3 and Section 264 b of the German Commercial Code (HGB)

157 Shareholdings

158 Auditors’ fees

158 Events after the balance sheet date

160 Declaration of compliance pursuant to Section 161

of the Stock Corporation Act (AktG)

160 Earnings per share

04

A. COMPANY PURPOSEALNO Aktiengesellschaft, Pfullendorf (hereinafter re-ferred to in brief as “ALNO AG”), a listed company under German law, and its subsidiaries (hereinafter referred to in brief as the “ALNO Group”) produce and sell fitted kitchens for the global market, mostly under the ALNO, IMPULS (up to 30 June 2015), PINO and WELLMANN brands, as well as PIATTI and FORSTER SCHWEIZER STAHLKÜCHEN or ALNOINOX. With regard to the group structure and the main activities of the ALNO Group, we refer to the information we provide in the management report and group management report. The Group’s ultimate parent company is ALNO AG, which has its registered offices in Heiligenberger Strasse 47, 88630 Pfullendorf, Germany.

B. ACCOUNTING POLICIES

1. Basis for preparation of the financial statements

The consolidated financial statements 2015 of ALNO AG are in accordance with the standards and interpretations of the International Accounting Standards Board (IASB), London, valid on the balance sheet date and applicable in the EU, and the regulations to be applied in addition according to Section 315a of the German Commercial Code (HGB).

The Group currency is the euro. All amounts are stated in thousands of euros (€ 000) unless there is a note to the contrary. As a result of rounding, it is possible that individual figures will not add up to exactly the total stated.

The consolidated financial statements and group man-agement report summarised in the management report of ALNO AG were approved by the Board of Manage-ment for submission to the Supervisory Board on 30 March 2016.

The consolidated financial statements are prepared under the assumption that the company will continue to operate on the basis of the ongoing historical procure-ment and manufacturing costs, with the exception of the financial assets that are to be valued at the fair value. With regard to the structure of the balance sheet, a clas-sification has been made according to current and non-current assets and liabilities. Items not due within one year are recorded as non-current assets or non- current liabilities. Furthermore, deferred taxes are re-corded as non-current assets and liabilities in each case.

As an important milestone in implementing its company strategy, on 17 January 2014, ALNO AG was able to take over 100% of the shares in AFG Küchen AG, Arbon, Switzerland, from AFG Arbonia-Forster-Holding AG, Switzerland. The transfer of ownership took place in the first quarter of 2014. AFG Küchen AG is the market lead-er in Switzerland. It included both well-known brands PIATTI and FORSTER SCHWEIZER STAHLKÜCHEN. With this largest ever takeover in the recent company history, ALNO AG is pushing ahead with its international growth strategy. After being integrated into the ALNO Group, AFG Küchen AG was renamed AFP Küchen AG (referred to below in short as “AFP”).

In addition to globalisation, the ongoing centralisation of sales and administrative units at the Pfullendorf site as well as optimising the brand and product portfolio were key components of the company strategy of ALNO AG in 2015. In operational terms, this will lead to a sustained improvement in the organisation and more efficient market development. For this purpose, substantial investments in IT, machinery and market expansion are planned in the 2016 financial year.

The Board of Management started refocusing the brand strategy and consequently the product portfolio back in 2014. Impuls Küchen GmbH, Brilon (referred to below as “Impuls”) was sold on 30 June 2015 as a result of the repositioning and refocusing. The cash inflow from the sale of the company and the services supplied in 2015 came to € 43.1 million.

NOTES


In 2015, ALNO AG acquired two important investors from China as anchor shareholders: Nature Home Holding Company Limited (“Nature”) and Shun Hing Electric Works & Engineering Company Limited (“Shun Hing”). Nature subscribed to a capital increase in March 2015 in which subscription rights were excluded. Shun Hing sub-scribed to a convertible bond in November 2015, which must be converted into equity subject to certain precon-ditions (“mandatory convertible”). In addition, Shun Hing acquired ca. 2.7% of the share capital of ALNO AG on the capital market. The cash inflow from the investment agreements in question totalled some € 12.0 million in 2015. Both shareholders will play a key role as strategic partners in the expansion of export sales to China and will strengthen the international growth strategy of ALNO AG.

By means of a notarised property purchase agreement dated 3 February 2016, ALNO AG and an affiliated com-pany have sold part of their factory premises subject to the condition precedent of agreeing the final purchase price as part of a sale & lease back transaction. The final purchase price and the final rental terms will be negoti-ated in the second quarter of 2016. An advance payment of € 15.0 million secured by mortgages was made by the purchaser in February 2016.

On 15 March 2016, a new moratorium agreement cover-ing total receivables in the amount of € 41.0 million was concluded to formalise the verbal agreement reached in December 2015, under which a partial amount of € 25.0 million will be repaid in stages from 29 September 2017 to 30 June 2018. The remaining € 16.0 million is due to be repaid in various tranches up to 31 December 2016.

For the loan, which the ALNO Group was granted by Bauknecht Hausgeräte GmbH, Stuttgart, in the amount of € 30.0 million in total on 11 April 2013, it was agreed by means of a supplement to the loan agreement of 26 February 2015 that a partial amount of € 10.0 million, which was due in September 2015, will not be due for repayment until July 2016. By means of a verbal agree-ment in December 2015, which was formalised in writing on 15 March 2016, the repayment of this partial amount of € 8.5 million would be extended by a further year until 31 July 2017, the remaining partial amount of € 1.5 million is due for repayment on 30 September 2016. The term of the remaining € 20 million remains unchanged.

On 16 January 2015, Bauknecht Hausgeräte GmbH, Stuttgart, granted ALNO AG a loan amounting to € 5 mil-lion until 15 April 2015. Repayment of the loan was ex-tended by various supplementary agreements; the last time being the formalisation on 15 March 2016 of the verbal agreement reached in December 2015 to extend the loan until 31 July 2017.


ALNO AG is also planning a financial or capital measure for the second quarter of 2016, which will lead to a cash inflow of some € 40.0 million.


In addition to ongoing business operations, the funds that will be released or received will be used, in parti cular, for further organic and inorganic growth abroad and for the implementation of measures to centralise sales and administrative units at the Pfullendorf site, which were started in 2015. As such, the Board of Management is pushing ahead with its globalisation strategy with the aim of expanding its profitable foreign business further. All the measures mentioned will contribute to improving the Group’s operating earnings potential long-term.

At € 66.8 million, the net sales of the ALNO Group were well up on the previous year’s figure (adjusted for the sale of Impuls) (€ 62.2 million) and above budget in the first two months of 2016. The current orders received in the ALNO Group were also well up on the previous year and are continuing their steep upward trend.

In view of this situation, the Board of Management is expecting a sharp increase in sales revenue and earnings for the ALNO Group in 2016, with the company structure unchanged and after adjustment for the special effects resulting from the sale of Impuls in 2015.


The ALNO Group as a going concern is dependent on the planned financial and capital measures amounting to being made available in full and on schedule, as well as continuation of a stringent liquidity management pol-icy. If necessary, investments will have to be postponed or reduced. Furthermore, the assumptions in the cor-porate planning, especially with regard to profit / loss and liquidity targets, will have to be accurate as planned. In the event that ALNO AG cannot raise sufficient funding to cover its liquidity requirement, Comco Holding AG, Nidau, Switzerland, will grant ALNO AG a funding line in the period from March to May 2016 up to a maximum of € 11.0 million.

2. Change in accounting policies

New standards to be applied

The ALNO Group observes the amended or new stand-ards in interpretations from the IASB, for which applica-tion is mandatory in 2015 to the extent that these were adopted by the EU. In detail, the following new aspects arose:

Interpretation IFRIC 21 – Levies (effective date: 17 June 2014; retrospective)

Improvements to IFRS 2011 – 2013 (effective date: 1 January 2015; retrospective)

Amendment to IAS 19 – Employee benefits: accounting for employee contributions (effective date: 1 February 2015; retrospective)

Improvements to IFRS 2010 – 2012 (effective date: 1 February 2015; retrospective)

Only the new regulations and their consequences which are relevant to the ALNO Group are outlined below. The remainder of the new regulations are not applicable to the ALNO Group, and consequently do not have any effects on the Group’s net assets, financial position and results of operations.

Interpretation IFRIC 21 – Levies

IFRIC 21 Levies clarifies the fact that a liability for levies imposed by government must be recognised as soon as an activity specified by law occurs, as a result of which a corresponding payment obligation is triggered. IFRIC 21 makes clear that liabilities for payment obligations which are linked to reaching a threshold should only be recognised when the specific threshold is reached. Application of IFRIC 21 for the first time had no effects on the consolidated financial statements of ALNO AG.

Improvements to IFRS 2011 – 2013

This is a collective standard, which was published in December 2013 and relates to changes in the various standards, application of which is mandatory for financial years beginning on or after 1 January 2015. These changes do not have any significant influence on the consolidated financial statements of ALNO AG:

IFRS 3 – Business combinations: Exclusion of associates companies from the scope of application of IFRS 3.

IFRS 13 – Fair value measurement: The exception stated in IFRS 13.52 for portfolios contains all contracts recog-nised according to IAS 39 or IFRS 9, irrespective of whether they meet the definition of a financial asset or financial liability according to IAS 32.

IAS 40 – Investment property: The purchase of invest-ment property can meet both the precondition for pur-chase of an individual asset, a group of assets and a business combination according to IFRS 3. If the pre-conditions of IFRS 3 are met for a business combination involving an investment property, it is clarified that both IFRS 3 and IAS 40 must be used.

Amendment to IAS 19 – Employee benefits: accounting for employee contributions

On 21 November 2013 the IASB amended IAS 19 – Employee benefits with regard to accounting for contri-butions by employees or third parties under defined benefit plans. An amendment to IAS 19.93 now clarifies the accounting policies to be used for contributions from employees or third parties set out in the formal terms of the plan if these are linked to service.


Following the amendment to IAS 19, contributions from employees or third parties may also be recognised as a reduction in the service cost in the same period in which they are payable if, and only if, they are linked solely to the employee’s service rendered in that period. This is possible in particular with contributions that are a fixed percentage of an employee’s salary, so the percentage of the employee’s salary does not depend on the em-ployee’s number of years of service to the company.

If the contributions depend on the years of service, they must be allocated to the service periods using the method which must also be applied for the gross income as in IAS 19.70.

The changes will not have any effect in the ALNO Group, because no contributions from employees or third parties are paid.


This is a collective standard which was published in December 2013 and relates to changes in the various standards. It is not expected that these changes will have any significant influence on the consolidated financial statements of ALNO AG:

IFRS 2 – Share-based payment: Definition of “vesting conditions” is clarified.

IFRS 3 – Business combinations: Recognition of condi-tional purchase price payments at fair value.

IFRS 8 – Operating segments: Disclosure of discretionary decisions taken to merge segments. The total assets to be reported only have to be reconciled with the assets of the company if there is regular reporting on the assets of the segment.

IFRS 13 – Fair value measurement: Clarification that it remains possible for assets and liabilities not to be dis-counted as long as the effects are not significant.

IAS 16 – Property, plant and equipment: Adaptation of the gross carrying amount on revaluation of property, plant and equipment so that this corresponds to the revaluation of the carrying amount.

IAS 24 – Information about related parties: A company that provides services in the area of corporate govern-ance for the reporting unit or the parent company of the reporting unit represents a related company for the reporting unit.

IAS 38 – Intangible assets: Adaptation of the gross car-rying amount on revaluation of an intangible asset so that this corresponds to the revaluation of the carrying amount.

First-time compliance with the other standards and in-terpretations had no effect on presentation of the ALNO Group’s net assets, financial position and results of operations, as such circumstances did not apply in the financial year.

Published accounting standards that are not yet applied

The following standards and interpretations have addi-tionally been adopted or amended by the IASB and en-dorsed by the European Union, but their application is not yet mandatory and they have not been applied pre-maturely. They must be applied for reporting periods beginning on or after the amendment concerned comes into force.

Improvements to IFRS 2012 – 2014 (effective date: 1 January 2016; retrospective)

Amendment to IAS 1 – Presentation of financial state-ments (effective date: 1 January 2016; retrospective)

Amendments to IAS 27 – Separate financial statements (effective date: 1 January 2016; retrospective)

Amendments to IFRS 11 – Accounting for acquisitions of interests in joint operations (effective date: 1 January 2016; retrospective)

IAS 16 / IAS 38 – Guidelines for depreciation methods of property, plant and equipment and intangible assets (effective date: 1 January 2016; retrospective)

IAS 16 / IAS 41 – Reporting of bearer plants in agricul-ture (effective date: 1 January 2016: prospective)


Only the new regulations and their consequences which are relevant to the ALNO Group are outlined below. The remainder of the new regulations are not applicable to the ALNO Group, and consequently do not have any effects on the Group’s net assets, financial position and results of operations.


This is a collective standard which was published in September 2014 and relates to changes in the various standards. It is not expected that these changes will have any significant influence on the consolidated financial statements of ALNO AG:

IFRS 5 – Non-current assets held for sale and discontin-ued operations: No change to the accounting when transferred from “held for sale” to “held for distribution” or vice versa; separate guidelines for terminating ac-counting as “held for distribution”.

IFRS 7 – Financial instruments: Disclosures: clarification that management contracts constitute continuing in-volvement and is to be included with the disclosures on the transfer. Clarification as to which disclosures on the netting of financial assets and liabilities in interim financial statements have to be provided.

IAS 19 – Employee benefits: Consideration of corporate bonds in the same currency (not only from the same country) in the calculation of the discount rate.

IAS 34 – Interim financial reporting: Addition to IAS 34 of the clarification that disclosures must either be provided in the interim financial statements or in another position in the interim report. The interim financial statements should contain a corresponding cross reference in this case.

Amendment to IAS 1 – Presentation of financial state-ments

As part of its higher-level project, the “Disclosure Initia-tive” to appraise and improve presentation and disclosure requirements, the IASB has published the initial amend-ments to IAS 1 Presentation of financial statements. These comprise limited changes, which are to encourage companies to exercise more discretion in the disclosure and presentation of information. This applies, for

example, to the clarification that materiality relates to the entire financial statements and the disclosure of imma-terial information can limit the usefulness of financial disclosures. More discretion should also be exercised in relation to the position in the financial statements and the order in which information is presented. Application of the amendments is mandatory for financial years be-ginning on or after 1 January 2016. This will probably result in changes to the structure of the Notes and the presentation.

The following new standards issued by the IASB have not yet been endorsed by the European Union. Their application is not yet mandatory and they will not be applied by the ALNO Group.

IFRS 9 – Financial instruments: Classification and measurement (effective date: 1 January 2018; retro-spective)

IFRS 9 – Financial instruments: hedge accounting (effective date: 1 January 2018; retrospective)

Amendments to IFRS 7 and IFRS 9 – Disclosures: Time-frame for application and transition rules (effective date: 1 January 2018; retrospective)

Amendment to IFRS 10, IFRS 12 and IAS 28 – Invest-ment entities: Application of the exemption from con-solidation (effective date: 1 January 2016; retrospective)

IFRS 14 – Regulatory deferral accounts (effective date: 1 January 2016; retrospective)

Amendments to IFRS 10 – Consolidated financial state-ments and IAS 28 – Investments in associates and joint ventures (effective date: 1 January 2016; retrospective)

IFRS 15 – New guidelines on revenue recognition (effective date: 1 January 2018; retrospective)

IFRS 16 – Leases (effective date: 1 January 2019)

Amendment to IAS 12 – Recognition of deferred tax assets for unrealised losses (effective date: 1 January 2017)


Amendment to IAS 7 – New disclosures about changes in financial liabilities (effective date: 1 January 2017)

The amendments apply for financial years beginning on or after the amendments come into force. Only the stand-ards of relevance to the ALNO Group and their conse-quences for the consolidated financial statements are outlined below. The remainder of the new regulations are not applicable to the ALNO Group, and consequently do not have any effects on the Group’s net assets, financial position and results of operations.

IFRS 9 – Financial instruments: Classification and measurement / hedge accounting

IFRS 9 contains rules for the classification and measure-ment of financial assets and financial liabilities and is to replace the existing IAS 39. Financial assets must now be reported either at amortised cost of acquisition or recognised through profit and loss at fair value, depend-ing on their respective characteristics and with due regard for the business model or models. Equity instru-ments must always be measured at fair value, in contrast to the requirements currently in force. Fluctuations in the value of equity instruments may, however, also be rec-ognised directly in equity. For equity instruments, only certain income from shareholdings will be recognised as income in this case. At present, changes in the value of securities recognised at fair value (debt instruments) are recognised in equity outside profit or loss in the consolidated financial statements. As a result of the changes introduced by IFRS 9, these changes in value will be posted in the income statement when IFRS 9 comes into effect.

With regard to the classification and measurement of financial liabilities, the previous rules contained in IAS 39 have been largely adopted. One change concerns the recognition of financial liabilities, which are measured at fair value and treated as income through application of the fair value option. In future, the change in fair value resulting from the change in own credit risk must be recognised under other operating results and not in the consolidated income statement. A second change re-lates to liabilities from derivative financial instruments which are linked to unlisted equity instruments. These liabilities must in future always be reported at fair value, while the currently applicable requirements permit meas-urement at the amortised cost of acquisition. Application

of IFRS 9 for the first time could have an impact on the measurement of shares in associated companies. These have previously been largely measured at cost of acqui-sition, since their fair values cannot be reliably deter-mined. Furthermore, from the point of first application, the unrealised exchange rate gains and losses on debt instruments previously recorded under equity are to be recognised as income in the consolidated income state-ment. Implementation of the new recognition regulations can result in greater fluctuations in profit / loss after tax.

Furthermore, IFRS 9 contains new provisions for hedge accounting. Changes with regard to the former recog-nition result in particular through new provisions with respect to the designation of instruments and risks, the requirements for effectiveness, the adjustment and reversal of hedging relations and, to some extent, the reporting of hedge relations on the balance sheet.

The standard replaces IFRIC 9 “Reassessment of Embedded Derivatives” and it also amends some of the existing standards, including IFRS 7 governing the disclosure requirement of financial instruments, as well as the provisions of versions of the IFRS 9 already pub-lished in 2009 and 2010. IFRS 9 was revised in July 2014. The new version contains revised regulations on the classification and valuation of financial assets and, for the first time, regulations on the impairment of financial instruments; the new expected loss model brings forward the recognition of losses in that both losses that have occurred and those expected in the future are reported. The effects for the ALNO consolidated financial state-ments are currently being investigated.

Amendments to IFRS 10 – Consolidated financial statements and IAS 28 – Investments in associates and joint ventures

The changes include application guidelines regarding the question of the extent to which unrealised profits or losses from transactions involving assets between an investor and an associated company or joint venture should be recorded in the investor’s annual financial statements. In this regard, it is important in particular to determine whether the assets in question concern busi-ness operations as defined in IFRS 3. If the transaction concerns a business operation, the complete revenue will be recorded with the investor. If the transaction only concerns the sale of assets that do not represent a business operation, a partial success shall be recorded.


IFRS 15 – Revenue recognition in customer contracts

This new standard brings together the former standards and interpretations that previously contained regulations on revenue recognition. IFRS 15 is to be applied to all sales transactions throughout the industry and contains a five-stage model that is oriented towards principles:

Identification of the contract with the customer Identification of the independent performance obligations in the contract

Determining the transaction price Distribution of the transaction price over the performance obligations under the contract

Recording of revenues when the company discharges its performance obligations

In future, sales recognition will take place at the transfer of control over the goods or services to the customer. The transfer of opportunities and risks only represents an indicator. Furthermore, IFRS 15 contains explicit reg-ulations on multi-components transactions. Furthermore, there are new guidelines regarding whether revenue is to be recorded for a particular time or over a period of time. New revenue thresholds will be introduced for variable revenues.

When IFRS 15 comes into force, IAS 11 Construction contracts and IAS 18 Revenue as well as the interpreta-tions IFRIC 13 Customer loyalty programmes, IFRIC 15 Agreements for the construction of real estate, IFRIC 18 Transfers of assets from customers and SIC 31 Revenue – barter transactions involving advertising services will cease to be valid.

The effects on the ALNO Group are still being analysed as at the present time. No material effect on the Group’s net assets, financial position and results of operations is expected according to the current stage of the analysis.

IFRS 16 Leases

The new standard on accounting for leases published by the IASB in January 2016 requires lessees to recog-nise the right of use to the leased item and a correspond-ing lease liability for most leases. There are only minor changes for lessors in comparison with IAS 17. More extensive disclosures in the notes are required for both

lessees and lessors under IFRS 16. It is estimated that application of the new standard and the planned increase in leasing activity will lead to the balance sheet being extended in subsequent periods. However, the exact extent of the effects still has to be determined.

Amendment to IAS 12: Recognition of deferred tax assets for unrealised losses

The amendments serve to clarify the reporting of deferred tax assets from unrealised losses, which arise in connec-tion with assets recognised at fair value, which is not uniform in practice. The amendments will have no impact in the ALNO Group, since they are only clarifications.

Amendment to IAS 7 – New disclosures about changes in financial liabilities

The aim of these changes is to give investors an insight into changes in financial liabilities. In future, cash and non-cash (such as currency gains or losses) changes are to be reported separately. The changes are not expect-ed to have any impact in the ALNO Group, since there are no non-cash components of financial transactions at present.

3. Consolidation principles

Scope of consolidation

Group parent is the company ALNO AG which is entered in the Register of Companies of Ulm Local Court (HRB 727041). In accordance with the principles of full consol-idation, the consolidated financial statements as at 31 December 2015 include not only ALNO AG, but also ten (previous year: nine) German and ten (previous year: eleven) foreign companies in which ALNO AG directly or indirectly holds a majority of the share capital.


The expansion to the scope of consolidation for fully con-solidated subsidiaries in Germany is due to the compa-nies newly established in 2015, namely ALNO IP AG & Co. KG, Pfullendorf and ALNO Beteiligungs UG, Pfullendorf, and outside Germany to the purchase of Küchen Nordic AB, Stockholm, Sweden. Outside Germany, ALNO Con-tracts Ltd., Sevenoaks, UK and Built-In Kitchen Ltd., Sevenoaks, UK were merged with ALNO U.K. Ltd., Leeds, UK. The deconsolidation relates to Impuls Küchen GmbH, Brilon, which was sold on 30 June 2015. The first-time consolidation among the companies valued at equity involves “OOO Pervaya mebelnaya fabrika – ALNO” based in St. Petersburg, Russia, in which ALNO AG holds 49% of the shares.

Company purchases

Purchase of Küchen Nordic AB, Stockholm / SwedenOn 1 October 2015, 61% of the shares and voting rights in Küchen Nordic AB, Stockholm, Sweden, were ac-quired by ALNO International GmbH, Pfullendorf. The company is engaged in domestic customer and retail business in the premium segment in Sweden. The purchase of these shares offers ALNO the opportunity to expand its presence on the Scandinavian market.

The purchase price for the acquisition comes to € 220 thousand and will be paid according to a defined payment schedule up to 2017. Payments of € 44 thou-sand were made in the 2015 financial year.

On the basis of a provisional purchase price allocation, the acquired assets and liabilities of Küchen Nordic AB were recognised at the following fair values at the time of acquisition:

The Group’s composition (excluding ALNO AG) is set out below:

in € 000 1 January 2015Initial

consolidationsLegal

changes Deconsolidation31 December

2015

Fully consolidated subsidiaries 20 20

of which domestic 9 2 0 −1 10

of which foreign 11 1 −2 0 10

Companies valued at equity 2 1 0 0 3

in € 000

Property, plant and equipment 512

Inventories 113

Accounts receivable trade and other assets 274

Liquid assets 128

Loans −201

Trade accounts payable and other liabilities −1,103

TOTAL NET LIABILITIES −277

Purchase price 220

Minority shares (share of net liabilities) 108

Goodwill 389

The goodwill is recognised in local currency (SEK) and is measured at the closing rate on the balance sheet date. The goodwill represents growth potential on the Swedish market and the opportunities to break into markets in other Scandinavian countries. Under Swedish law, good-will is not deductible against tax. Küchen Nordic AB is assigned to the CGU end customer.

Since the date of acquisition, Küchen Nordic AB has contributed € 779 thousand to sales revenues and a loss of € 176 thousand to the consolidated result after taxes on income. Had the company been fully consolidated for the first time as per 1 January 2015, this would have resulted in an increase of € 2,881 thousand in consoli-dated sales revenue and an increase of € 30 thousand in the consolidated result after taxes on income in 2015.

Presentation of combined financial information is waived on the grounds of immateriality. The minority shareholders, who hold 39%, are two natural persons holding 30% and 9% respectively. The shares in equity and in the income statement are accordingly shown as minority interests.


Company purchases in previous years

AFP Küchen AG, Arbon, Switzerland (AFG Küchen AG at the time of acquisition), UK Surface Solutions Ltd., Wolverhampton, UK, and Bradbury’s (Holdings) Limited, Exeter, UK, were purchased in 2014.

No changes resulted from the acquisitions of AFP Küchen AG, Arbon / Switzerland and UK Surface Solu-tions Ltd., Wolverhampton / UK in 2015.

An advance payment on the purchase price for the shares in Bradbury’s (Holdings) Limited of € 37 thousand was made in the 2014 financial year. An additional pay-ment of € 53 thousand is expected in the first quarter of 2016 on the basis of the Bradbury’s Group’s results in the period from 1 November 2014 to 31 October 2015.

Deconsolidation

Impuls KüchenALNO sold its shares in Impuls Küchen GmbH, Brilon, on 30 June 2015. The selling price of € 40,832 thousand was paid in cash. A cash inflow in the amount of € 2,280 thousand was also received for the services supplied to Impuls by the ALNO Group in the second half of the year. In return, an amount of € 2,890 thousand was repaid for the subsequent offsetting of receivables and liabilities. A profit in the amount of € 28,714 thousand resulted in connection with the deconsolidation, which is reported in other operating income. The difference between the sales price and the gain on deconsolidation chiefly resulted from the residual book values of the as-sets sold and from consolidation effects.

Assets and liabilities at the time of sale

Deconsolidations in the previous year

ALNO Middle East FZCO, Dubai, UAE, and Wellmann Bauteile GmbH, Enger, were deconsolidated in the pre-vious year.

Consolidation policies

All companies included in the consolidated financial statements prepare their annual financial statements as per the closing date of the single-entity financial state-ments of ALNO AG, i.e. as per the closing date of the consolidated financial statements. The consolidated financial statements are prepared on the basis of uniform recognition and measurement policies in compliance with the IFRS requirements to be applied in the EU. All significant subsidiaries are fully included in the consolidated financial statements. Subsidiaries are com-panies over which ALNO AG holds a direct or indirect power to dispose in accordance with IFRS 10 and, from this, derives positive and negative variable returns which can be influenced in their amount by the power to dis-pose (control). Subsidiaries are completely included in the consolidated financial statements from the point at which it becomes possible to exercise control. Chang-es to the investment quota in a subsidiary that do not result in the end of control are reported as an equity

in € 000

Fixed assets 2,404

Deferred tax assets 115

Non-current accounts receivable trade and other non-current assets 105

Inventories 3,711

Accounts receivable trade and other assets 17,485

Liquid assets 122

ASSETS 23,942

Provisions 901

Other current financial liabilities 945

Trade accounts payable and other liabilities 17,985

LIABILITIES 19,831


trans action. If the possibility of the Group to control a subsidiary comes to an end, it is removed from the scope of consolidation. In this case, all assets and liabilities as well as all non-controlling shares and components of the equity are derecognised. Any profit or loss resulting is recorded in the consolidated income statement.

Capital consolidation is effected in accordance with IFRS 3 using the acquisition method. At the time of ac-quiring control, the subsidiary’s new measured assets and liabilities, as well as contingent liabilities insofar as they are not contingent on a future event, are offset at the fair value of the consideration paid for the asset or liability. Contingent purchase price payments are includ-ed in the fair value of the consideration to be paid in the expected amount and carried as liabilities. Subsequent adjustments in contingent purchase price payments are recognised as profit or loss. Incidental costs asso-ciated with the acquisition are carried as expenses at the time incurred.

A remaining asset-side balancing item is recognised as goodwill. A remaining liabilities-side balancing item is recognised in the consolidated income statement. The unimpaired status of capitalised goodwill is checked within the framework of an impairment test as at the closing date. Negative differences resulting from capital consolidation are recognised as income in the consoli-dated income statement. There is an option with regard to recognition of non-controlling shares; they can either be recognised at the pro rata net assets attributable to them or at fair value. The Group may apply this option separately for each business combination.

Income and expenses and accounts receivable and pay-able between consolidated companies are eliminated, as are provisions. Interim results in the fixed assets and inventories from intra-Group deliveries are eliminated. Deferred taxes are recognised on consolidation meas-ures with impact on profit or loss. Intra-Group guarantees are eliminated. Pro rata intercompany profits with joint ventures to be eliminated as part of the consolidation of intracompany results are deducted from the proportions of the joint ventures according to IAS 28.22 in conjunction with SIC-13 or IAS 28R.30.

Entities are no longer included in the consolidated fi-nancial statements when the parent’s control ends.

Currency translation

The consolidated financial statements are prepared in euros, the functional currency of ALNO AG.

The annual financial statements of foreign subsidiaries are translated into euros according to the functional cur-rency concept pursuant to IAS 21. Since all consolidated companies pursue their business independently, the functional currency is always the currency of the country concerned. Assets and liabilities are therefore translated at the exchange rate on the closing date; items in the consolidated income statement are translated at the average exchange rate of the year; equity is recognised at historical rates. Differences resulting from application of the different foreign exchange rates are recognised outside profit or loss.

Differences due to currency translation of intra-Group accounts receivable and payable in foreign currency, which are neither scheduled nor expected to be settled within a foreseeable period of time, are recognised in the consolidated financial statements outside profit or loss under the provision from currency translation in accord-ance with IAS 21.32.

Monetary assets and liabilities in foreign currency are posted in the single-entity financial statements at the exchange rate on the transaction date and translated at the closing rate on each closing date. Currency differ-ences are recognised as income and reported under other operating income and expenses. Non-monetary foreign currency items are translated at the exchange rate on the transaction date.

In the previous year, exchange losses were offset against exchange gains for presentation in the consolidated in-come statement.


The following exchange rates to the euro were used:

4. Summary of main accounting policies

Consideration of earnings

Sales are posted at the date on which risk is transferred following delivery on the basis of the terms of sale, minus returns, volume and price discounts and value-added tax. Only the product sales resulting from ordinary busi-ness activities and the associated accessory services are recognised as sales.

Earnings from services rendered are recognised in ac-cordance with the degree of completion, if the amount of income can be reliably determined and receipt of the economic benefit can be expected.

Other earnings are realised in accordance with the con-tractual agreements and on completion of the service.

Financial result

The financial result essentially comprises interest income from cash investments and interest expenses for loans.

Interest received and paid is recognised as income at the time of creation.

Cost of financing is capitalised as part of the cost of acquisition or production, insofar as it can be assigned to a qualified asset. In all other cases, it is immediately recognised as an expense.

31 December 2015 31 December 2014 Average rate 2015 Average rate 2014

per € per € per € per €

GBP 0.73703 0.78256 0.72550 0.80655

CHF 1.08275 1.20282 1.06590 1.21482

USD 1.09262 1.21555 1.10920 1.32925

SEK 9.16739 n / a 9.30430 n / a

RUB 79.96765 n / a n / a n / a

AED n / a 4.46482 n / a 4.88332

Income taxes

As required by IAS 12, income tax refunds and liabilities for the current and prior periods are measured in the expected amount of the refund from, or payment to, the tax authorities. Amounts are calculated on the basis of the tax rates and tax laws in force on the balance sheet date. Reported uncertain income tax items are estimated on the basis of the provisionally expected tax payments.

In addition, the deferred income tax reliefs or burdens to be calculated in compliance with IAS 12 from temporary differences between the carrying values recognised in the consolidated financial statements prepared accord-ing to IFRS and their local tax bases, as well as from consolidation measures, are recognised as either de-ferred tax assets or deferred tax liabilities. Deferred tax assets are additionally recognised on tax loss carry-forwards if it is sufficiently probable that the resultant tax reliefs will actually occur in the future. The soundness of deferred tax assets on tax loss carryforwards is assessed on the basis of the tax planning for the next five years. Recognition of deferred tax assets also takes account of the existence of temporary differences to be taxed in conjunction with the same tax authorities and the same tax subject.

Deferred taxes are calculated on the basis of the tax rates in force in the various countries at the time of realisation or to be expected with reasonable probability according to the present legal situation.


The carrying amount of deferred tax assets is checked on each closing date and reduced to the extent that adequate taxable income which can at least partly be set off against the deferred tax entitlement no longer appears probable. Unrecognised deferred tax entitle-ments are checked on each closing date and recognised to the extent that future taxable income makes realisation of the deferred tax entitlement probable.

Deferred tax assets and liabilities are netted when the conditions have been met for setting off taxes receivable against taxes payable.

In addition, deferred tax assets and liabilities are not rec-ognised when they result from first-time recognition of goodwill or of an asset or liability associated with a trans-action not relating to a business combination, and when such first-time recognition impacts neither the reported profit / loss before income taxes nor the taxable income.

Deferred taxes relating to items which are directly rec-ognised in equity are reported in equity and not in the consolidated income statement.

Turnover tax

Income, expenses, intangible assets and property, plant and equipment are recognised after deduction of turno-ver tax, insofar as the turnover tax can be collected or is refunded by a tax authority. Accounts receivable and payable are recognised inclusive of turnover tax. Provisions are carried as liabilities without considering turnover tax.

The amount of turnover tax refunded by, or payable to, a tax authority is reported under other assets and other liabilities.

Intangible assets

Purchased and self-generated intangible assets are capitalised in compliance with IAS 38 at their acquisition or production cost if use of the asset is probably asso-ciated with future economic benefit and the costs of the asset can be reliably determined.

The self-created intangible assets are significant expan-sions to the standard SAP software in the form of various functions and modules specifically for kitchen manu-facturers. These developments go far beyond classic customising of standard SAP software. The six activation criteria of IAS 38.57 are cumulatively met. The self- created intangible assets are written down on a straight-line basis in accordance with their useful life of five years.

The cost of production of intangible assets exclusively comprises directly attributable costs.

Development costs which cannot be capitalised were recognised as income in the amount of € 1,369 thousand (previous year: € 1,273 thousand). No borrowing costs arose in this regard.

With regard to the reporting and measurement of good-will, we refer to the information provided on consolidation policies, as well as to the information in the “Impairment test for goodwill” section.

Significant items concern the PIATTI brand acquired in 2014, the right to use FORSTER as well as PIATTI and FORSTER customer relations derived from the purchase price allocation (PPA) as part of the purchase of AFP. The PIATTI brand has an indefinite useful life. Customer relations at PIATTI retailers are amortised on a straight-line basis in accordance with their useful life of 15 years. Customer relations at PIATTI project business were amortised on a straight-line basis in accordance with the useful life of 10 years until the unscheduled write-down on 31 December 2015 as part of the impairment test. Other intangible assets are amortised on a straight-line basis in accordance with their useful life of 5 years.

Other intangible assets – predominantly software and other industrial property rights – are recognised at ac-quisition cost and amortised in accordance with their useful life of two to ten years.

Carrying amounts, useful life and amortisation methods are reviewed at the end of each financial year and ad-justed if required.

Research costs and development costs which cannot be capitalised are recognised as expense items at the time incurred.


An intangible asset is derecognised either on disposal or when further use or sale of the asset is not expected to yield any further economic benefit. Gains or losses resulting from the disposal of assets are calculated as the difference between net proceeds from sale and carrying amount of the asset and recognised as income in the income statement in the period in which the asset is derecognised.

Property, plant and equipment

Property, plant and equipment is measured at acquisition or production cost in compliance with IAS 16, minus amortisation, depreciation and impairment losses.

They are written down on a straight-line basis and pro rata temporis in accordance with the following estimated useful economic life:

Property, plant or equipment is derecognised either on disposal or when further use or sale of the asset is not expected to yield any further economic benefit. Gains or losses resulting from the disposal of assets are calculat-ed as the difference between net proceeds from sale and carrying amount of the asset and recognised as income in the income statement in the period in which the asset is derecognised.

Carrying amounts, useful life and amortisation methods are reviewed at the end of each financial year and ad-justed if required.

Government grants and subsidies do not lead to a re-duction in the cost of acquisition of the relevant assets, but are instead carried as deferred liabilities in com-pliance with IAS 20.24 and reversed as income over the useful life of the subsidised assets.

Years

Buildings 25 – 60

Machinery, factory and office equipment 2 – 25

IT systems 3 – 7

Finance leases

In compliance with IAS 17, economic ownership of the leased assets must be attributed to the lessee if the latter acquires all the main risks and rewards associated with the asset (finance lease). All leased assets which are classified as belonging to a finance lease are capitalised in the consolidated financial statements at the lower of the fair value and present value of the lease payments. Leased assets are depreciated by the straight-line method over the shorter of their useful life or the lease term.

Impairment tests

Impairment test for goodwill as well as intangible assets with an indefinite useful lifeGoodwill from business combinations is attributed to the cash generating units benefiting from the combinations. The Group is primarily controlled on the basis of sales channels.

The following CGUs within the meaning of IAS 36 have been identified for the purposes of the impairment test for goodwill:

CGU Wellmann large outlet in Germany (LGO), CGU Wellmann kitchen specialists in Germany (KSP), CGU Wellmann self-service stores / RTA stores in Germany (Self / RTA),

CGU Wellmann export trade, CGU Wellmann project business in Germany, CGU Wellmann project business outside Germany, CGU Wellmann Other, CGU ALNO Logistik & Service Other (previous year: logismo Other),

CGU ALNO UK project business outside Germany, CGU ALNO UK export trade, CGU ALNO UK end customer, CGU Küchen Nordic end customer (new in 2015)

Legal units carrying goodwill are Wellmann, ALNO Logistik & Service (renamed, previous year: logismo), ALNO UK and Küchen Nordic. As a result, these afore-mentioned CGUs have been subjected to a goodwill impairment test.


The change in the goodwill is as follows:

The goodwill is distributed between individual CGUs as follows:

2015 ALNO AG Wellmann

ALNO Logistik &

Service ALNO UKKüchen Nordic Total

Gross amount of goodwill 2,607 1,483 241 2,375 389 7,095

Additions

in 2015 0 0 0 0 389 389

Cumulative depreciation

in previous years −2,607 0 0 0 0 −2,607

in 2015 0 0 0 0 0 0

Currency translation differences

in previous years 0 0 0 +95 0 +95

in 2015 0 0 0 +155 0 +155

Carrying amounts 0 1,483 241 2,625 389 4,738

in € 000

Wellmann

CGU LGO 144

CGU KSP 614

CGU Self / RTA 84

CGU export trade 607

CGU project business in Germany 19

CGU project business outside Germany 6

CGU Other 8

1,483

ALNO Logistik & Service

CGU Other 241

241

ALNO UK

CGU project business outside Germany 1,305

CGU export trade 1,258

CGU end customer 62

2,625

Küchen Nordic

CGU end customer 389

389

Wellmann comprises Gustav Wellmann GmbH & Co. KG and its subsidiaries. The goodwill created in conjunction with the acquisition of the logismo Group by ALNO AG is ascribed to the cash generating group ALNO Logistik & Service. This was called logismo last year but has been renamed. The cash generating unit ALNO UK, to which the Built-In Group’s and Bradbury’s goodwill have been ascribed, comprises ALNO UK and its subsidiaries. The goodwill created in conjunction with the acquisition of Küchen Nordic AB is ascribed to the cash generating group Küchen Nordic.

The intangible asset with an indefinite useful life concerns the PIATTI brand, which was purchased in the course of the takeover of AFP Küchen AG. The PIATTI brand is allocated to the Other segment as well as the CGU AFP Other. The carrying amount of the PIATTI brand is unchanged on the previous year and amounts to € 24,833 thousand.

The relevant factors that are of significance in determin-ing the useful life of the brand include, in particular, de-velopment of the sales markets, consumer preferences, changes in the technological and regulatory environment as well as the management strategies for nurturing the brand. Taking account of these factors, the management has arrived at the decision that there is currently no fore-seeable restriction in the utility of this brand or its ability to generate corresponding cash flows for the unit.


The unimpaired status of goodwill and of intangible assets with an indefinite useful life is determined on the basis of impairment tests at year-end and also during the year if there are any signs of a possible write-down requirement.

When performing impairments tests to IAS 36, the re-coverable amount is determined for the cash generating unit concerned.

The recoverable amount is the higher of the fair value of the cash generating unit minus costs to sell or value in use.

The value in use is equal to the present value of future cash flows expected from continued use of the cash generating unit and its disposal at the end of its useful life. The value in use for goodwill is determined in com-pliance with IAS 36 using the discounted cash flow method based on data from the authorised corporate planning after correction for investment in expansion and planned reorganisation. The planning horizon extends over five years. Cash flows are discounted using the weighted average capital cost (WACC) for a group of comparable entities, taking into account the risk-free base rate, premium for market risks (multiplied by the beta-factor), growth discount in the perpetual annuity, cost of borrowing and capital structure. Forecasting of the cash flows is based on the results calculated for the individual Group companies within the context of a detailed planning process using internal empirical values and external economic figures.

The licence fee analogy method is used for calculating the value in use of the PIATTI brand. Hierarchical level 2 was used when determining the fair value in order to calculate the interest rates, whereas all other input factors are allocated to hierarchical level 3.

The fair values after deduction of the costs to sell for the individual cash generating units are also calculated using the discounted cash flow method based on corporate planning. If the approved corporate planning does not contain any expansion investments or planning restruc-turing, the value in use largely corresponds to the fair value following deduction of the costs to sell.

The discount rate used for the PIATTI brand amounts to 10.1% (previous year: 10.9%) and includes a 2% premium on the WACC.

An impairment is recognised when the recoverable amount is lower than the carrying amount of the cash generating unit. A reversal of goodwill impairment is not undertaken, in compliance with IAS 36.

Corporate planning for the years 2016 to 2020 is essen-tially based on the following assumptions. The assump-tions are specified for each legal unit, and these have been applied to all CGUs in the particular legal unit. The two legal units in Germany, ALNO AG and the Wellmann Group, have been grouped together because they are German-based production plants of the same type:

A change in sales between 4.4% and 30.8% p.a. (pre-vious year: 3.9% and 39.0% p.a.) was assumed for ALNO AG and Wellmann. The assumption is based on a change in the volume of sales in Germany between 1.7% and 25.2% p.a. (previous year: 1.3% and 14.0% p.a.) and outside Germany between 5.0% and 70.3% p.a. (previous year: 2.6% and 133.7% p.a.) as well as on ad-justments in price in Germany between 0.8% and 16.3% p.a. (previous year: −1.6% and 6.0% p.a.) and outside Germany between 2.5% and 3.9% p.a. (previous year: −26.0% and 6.5% p.a.). In the case of purchasing prices, material costs are expected to change by between −7.4% and 7.4% p.a. per cabinet (previous year: −21.1% and 0.5% p.a.). When planning personnel costs, an annual increase between 0.1% p.a. and 8.9% p.a. (previous year: 0.0% to 9.7% p.a. with a constant number of employees) is assumed with an increasing number of employees.

In the case of ALNO UK, sales revenue is expected to increase by 7.5% in 2016 and to increase by between 4.3% and 8.4% p.a. (previous year: between 3.1% and 18.8% p.a.) from 2017 onwards. The cost of purchased material is expected to rise by 1.7% in 2016 and to increase by between 4.7% and 8.7% p.a. (previous year: 3.4% and 18.7% p.a.) from 2017 onwards. An increase of 32.7% with a growing number of employees has been assumed for 2016 when planning personnel costs. From 2017 onwards, an annual rise of between 3.0% and 8.8% p.a. with a constant number of employees (previous year: between 1.7% and 18.8% p.a. with an increasing number of em-ployees) is assumed in conjunction with personnel costs.


Overall, a change in other operating income of between 0.3% and 51.2% p.a. (previous year: 0.3% and 13.2% p.a.) was assumed for ALNO Logistik & Service (previous year: logismo). An annual increase of between 0.0% and 45.8% p.a. (previous year: 0.0% and 14.9% p.a.) was assumed when planning forwarding expenses. An increase of 92.9% in personnel costs was assumed for 2016 with an increasing number of employees (because of reclassifications within the Group) and with a constant number of employees from 2017 onwards (previous year: +2.0% p.a.).

In the case of AFP, sales revenue is expected to increase by 10.3% in 2016 and to increase by between 5.0% and 6.5% p.a. (previous year: between 0.1% and 8.6% p.a.)

2015 ALNO AG Wellmann

ALNO Logistik &

Service ALNO UK Küchen Nordic

Capital cost before income taxes 11.01% 11.28% 12.11% 11.45% 10.48%

Capital cost after income taxes 8.88% 8.83% 8.88% 10.20% 8.74%

Risk-free interest rate 1.50% 1.50% 1.50% 1.50% 1.50%

Market risk premium 6.75% 6.75% 6.75% 6.75% 6.75%

Beta factor 1.24 1.24 1.24 1.25 1.25

2014 ALNO AG Wellmann logismo ALNO UK

Capital cost before income taxes 11.29% 11.59% 11.67% 10.57%

Capital cost after income taxes 8.86% 8.79% 8.86% 8.64%

Risk-free interest rate 1.75% 1.75% 1.75% 1.75%

Market risk premium 6.75% 6.75% 6.75% 6.75%

Beta factor 1.23 1.23 1.23 1.25

from 2017 onwards. A licence rate of 2% p.a. (previous year: 2%) has been assumed as part of the licence fee analogy.

An increase of between 16.6% and 27.4% p.a. has been assumed at Küchen Nordic from 2017 onwards. The cost of purchased materials is expected to increase by between 8.7% and 23.9% p.a. from 2017 onwards. An annual increase of between 4.3% and 40.5% with a growing number of employees has been assumed from 2017 onwards when planning personnel costs.

On the basis of these cash flow prognoses, the value in use was determined for the cash generating units with the aid of the following valuation parameters:


Based on the average for comparable companies, the cost of borrowed capital before taxes on income equalled between 2.92% and 4.85% (previous year: between 3.35% and 4.54%). At 87.47% to 12.53% (previous year: 82.26% to 17.74%), the ratio of equity to borrowed capi-tal is in keeping with the average capital structure of comparable companies. An effective tax rate of between 20% and 27.73% (previous year: between 21.0% and 31.05%) was assumed in the applied consideration of input tax.

A growth rate of 1% (previous year: 1%) is assumed for the following cash flows after the end of the five-year planning horizon. This growth rate matches the long-term average growth rate in the kitchen furniture industry.

Summary of cash generating units carrying goodwill:

Legal entities / CGUs 2015 in € 000Carrying amount

Value in use

Wellmann

CGU LGO 1,146 16,931

CGU KSP 5,170 84,749

CGU Self / RTA 1,074 21,924

CGU export trade 2,374 57,315

CGU project business in Germany 198 404

CGU project business outside Germany 96 1,389

CGU Other 486 18,736

10,544 201,448

ALNO Logistik & Service

CGU Other 697 2,564

697 2,564

ALNO UK

CGU project business outside Germany 9,985 13,539


CGU end customer 194 1,096

16,193 54,061

Küchen Nordic (new in 2015) 491 11,663

491 11,663

The situation for this in the previous year was as follows:

In each case the recoverable amount was based on the value in use. In this case, each of the values in use also corresponds to the fair value less costs to sell.

As outlined above, the forward-looking assumptions underlying the calculations are based on various uncer-tain estimates. These uncertainties can have a significant effect on the result of the calculations. The effect of different planning scenarios on the value in use of the cash generating units ALNO, Wellmann, ALNO Logistik & Service, ALNO UK, AFP and Küchen Nordic is outlined below (referred only to the change in value of the perpet-ual annuity as value-driving factor).

Legal entities / CGUs 2014 in € 000Carrying amount

Value in use

Wellmann

CGU LGO 1,096 13,398

CGU KSP 5,014 57,183

CGU Self / RTA 1,290 7,806


CGU project business in Germany 174 1,809

CGU project business outside Germany 87 572

CGU Other 477 783

10,163 138,060

logismo

CGU Other 488 2,100

488 2,100

ALNO UK

CGU project business outside Germany 5,325 36,076


CGU end customer 163 1,793

11,754 75,343


Wellmann CGU LGO:

Wellmann CGU KSP:

Wellmann CGU Self / RTA:

Wellmann CGU export trade:

in € 000 WACC

Free cash flow −2% −1% 0% 1% 2%

−20% 19,345 16,012 13,545 11,650 10,151

−10% 21,763 18,013 15,238 13,106 11,420

0% 24,181 20,015 16,931 14,563 12,689

10% 26,599 22,016 18,625 16,019 13,958

20% 29,017 24,017 20,318 17,475 15,227

in € 000 WACC

Free cash flow −2% −1% 0% 1% 2%

−20% 96,213 79,888 67,799 58,504 51,148

−10% 108,240 89,874 76,273 65,816 57,541

0% 120,267 99,860 84,749 73,129 63,935

10% 132,294 109,846 93,223 80,442 70,328

20% 144,320 119,832 101,698 87,755 76,722

in € 000 WACC

Free cash flow −2% −1% 0% 1% 2%

−20% 24,745 20,606 17,539 15,180 13,312

−10% 27,838 23,181 19,731 17,077 14,976

0% 30,931 25,757 21,924 18,975 16,640

10% 34,024 28,333 24,116 20,872 18,304

20% 37,117 30,908 26,308 22,770 19,968

in € 000 WACC

Free cash flow −2% −1% 0% 1% 2%

−20% 63,840 53,512 45,851 39,950 35,271

−10% 71,820 60,202 51,583 44,944 39,679

0% 79,800 66,891 57,315 49,938 44,088

10% 87,781 73,580 63,046 54,931 48,497

20% 95,761 80,269 68,777 59,925 52,906

Wellmann CGU project business in Germany:

Wellmann CGU project business outside Germany:

Wellmann CGU Other:

ALNO Logistik & Service:

in € 000 WACC

Free cash flow −2% −1% 0% 1% 2%

−20% 652 462 323 219 138

−10% 733 519 364 247 156

0% 814 577 404 274 173

10% 896 635 445 301 190

20% 977 693 485 329 208

in € 000 WACC

Free cash flow −2% −1% 0% 1% 2%

−20% 1,636 1,334 1,111 941 807

−10% 1,841 1,501 1,250 1,059 908

0% 2,045 1,668 1,389 1,176 1,009

10% 2,250 1,834 1,528 1,294 1,109

20% 2,454 2,001 1,667 1,412 1,210

in € 000 WACC

Free cash flow −2% −1% 0% 1% 2%

−20% 20,430 17,310 14,989 13,197 11,771

−10% 22,984 19,473 16,863 14,846 13,243

0% 25,538 21,637 18,736 16,496 14,714

10% 28,092 23,801 20,610 18,146 16,186

20% 30,646 25,965 22,484 19,795 17,657

in € 000 WACC

Free cash flow −2% −1% 0% 1% 2%

−20% 2,878 2,403 2,051 1,779 1,564

−10% 3,238 2,704 2,308 2,002 1,759

0% 3,597 3,004 2,564 2,224 1,955

10% 3,957 3,305 2,820 2,447 2,150

20% 4,317 3,605 3,077 2,669 2,346


ALNO UK CGU project business outside Germany:

ALNO UK CGU export trade outside Germany:

ALNO UK CGU end customer:

Küchen Nordic:

in € 000 WACC

Free cash flow −2% −1% 0% 1% 2%

−20% 14,774 12,557 10,831 9,450 8,322

−10% 16,621 14,127 12,185 10,631 9,362

0% 18,467 15,697 13,539 11,812 10,402

10% 20,314 17,266 14,892 12,993 11,442

20% 22,161 18,836 16,246 14,175 12,483

in € 000 WACC

Free cash flow −2% −1% 0% 1% 2%

−20% 41,040 35,707 31,541 28,198 25,458

−10% 46,170 40,171 35,484 31,723 28,641

0% 51,300 44,634 39,426 35,248 31,823

10% 56,430 49,097 43,369 38,773 35,005

20% 61,561 53,561 47,311 42,297 38,187

in € 000 WACC

Free cash flow −2% −1% 0% 1% 2%

−20% 1,141 993 877 784 708

−10% 1,284 1,117 987 882 796

0% 1,426 1,241 1,096 980 885

10% 1,569 1,365 1,206 1,078 973

20% 1,712 1,489 1,315 1,176 1,062

in € 000 WACC

Free cash flow −2% −1% 0% 1% 2%

−20% 13,245 10,991 9,330 8,059 7,057

−10% 14,900 12,365 10,496 9,066 7,939

0% 16,556 13,738 11,663 10,074 8,821

10% 18,212 15,112 12,829 11,081 9,703

20% 19,867 16,486 13,995 12,088 10,585

Impairment test for other intangible assets, property, plant and equipmentOther intangible assets, property, plant and equipment were scrutinised at the closing date to determine wheth-er there were any indications of a possible impairment. An impairment test in accordance with IAS 36 is per-formed if such indications are found.

Impairment testing involves determining the recoverable amount for each individual asset or, if cash inflows can-not be allocated to the individual asset, for a cash generating unit. Cash generating units are defined as being the smallest units capable of generating cash flows independently.

The recoverable amount is the higher of the fair value of the asset or cash generating unit minus costs to sell or value in use.

An impairment is recognised when the recoverable amount is lower than the carrying amount of the asset or cash generating unit. If the reasons for a previously recognised impairment loss no longer apply, the impair-ment loss is reversed provided that the reversal does not cause the carrying amount to exceed the amortised cost of acquisition or production.

An impairment test was carried out for the right to use FORSTER as well as for customer relations resulting from the purchase of AFP Küchen AG. The following CGUs were defined in this case:

The right to use FORSTER, the PIATTI project business customer relations, PIATTI retailers, PIATTI kitchen service, FORSTER kitchen service are allocated to the AFP Others CGU. The assets capitalised for the right to use FORSTER and the customer relations as part of the purchase price allocation are allocated to the Other segment.

The value in use of customer relations was calculated on the basis of the residual value method and on the basis of the licence fee analogy method for the right to use FORSTER. The discount rate applied is between 8.8% and 9.9% (previous year: between 9.5% and 10.7%).

As a result of lower EBITDA margins for PIATTI project business and the restructuring of the kitchen service segment, the PIATTI customer relations are subject to impairments.


The change in the carrying amount of the individual assets is as follows:

Previous year:

At equity investments

Interests in joint ventures are included in the consoli dated financial statements using the equity method.

Acquisition costs are increased or decreased by the pro-rated profit / loss for the year. Disbursements reduce, and capital increases increase, the carrying amount of the interest. Changes in equity outside profit or loss are like-wise recognised in Group equity on a pro rata basis. If there is any indication of an impairment, an impairment test is performed in compliance with IAS 36.

Inventories

Raw materials and supplies, as well as goods pur-chased for resale, are always measured at the lower of average cost of acquisition including incidental acqui-sition expenses or net proceeds from sale, as required by IAS 2.

in € 000Right to use

Forster

Piatti customerrelations

Project business

Piatti customer relationsRetailers

Piatti customer relationsKitchen service

Forster customer relations Kitchen service Total

CARRYING AMOUNT ON 1 JANUARY 1,888 9,143 8,889 242 233 20,395

Scheduled depreciation 314 1,016 636 13 12 1,991

Book value as at 31 December before impairment 1,574 8,127 8,253 229 221 18,404

Value in use 1,788 0 8,878 0 5,431 16,097

Impairment losses 0 −8,127 0 −229 0 −8,356

CARRYING AMOUNT AS AT 31 DECEMBER 1,574 0 8,253 0 221 10,048

in € 000Right to use

Forster

Piatti customerrelations

Project business

Piatti customer relationsRetailers

Piatti customer relationsKitchen service

Forster customer relations Kitchen service Total

Addition 2014 1,888 11,087 11,574 388 233 25,170

Value in use 2,959 9,143 8,889 242 1,315 22,548

Impairment losses 0 −1,944 −2,685 −146 0 −4,775

CARRYING AMOUNT AS AT 31 DECEMBER 1,888 9,143 8,889 242 233 20,395

In compliance with IAS 2, work in process and finished goods are measured at the cost of production, provided that this does not exceed the expected net proceeds from sale. Production costs include all direct costs attributable to the production process, as well as a reasonable portion of production-related overheads.

The net revenue value is equal to the estimated proceeds from sale that can be realised in the ordinary course of business, minus the estimated costs up to completion and the estimated costs required for distribution.

Financial and other assets

Financial assets essentially comprise liquid assets, secu-rities, financial receivables and trade accounts receivable.

The option of classifying financial assets as financial assets to be measured at fair value through profit or loss when recognised for the first time is not exercised.


In compliance with IAS 39, trade accounts receivable are classified as “loans and receivables issued by the com-pany” and recognised at the amortised cost of acquisi-tion using the effective interest rate method. Reasonable specific valuation allowances equal to the difference between the carrying amount of the asset and the present value of expected future cash flows are made for doubtful accounts receivable. The specific valuation allowances are recognised in a value adjustment account as soon as there are significant impairments. If the im-pairment decreases in subsequent periods, the valuation allowance is reversed, provided that the carrying amount does not exceed the amortised cost of acquisition fol-lowing reversal. Impairment losses and their reversals are recognised as income in the consolidated income statement. Accounts receivable are derecognised when their irrecoverability is established.

Securities and interests held in associated companies are classified as “available-for-sale financial assets”. After first-time recognition, they are always measured at fair value. In the case of securities, this is equal to the current price. Gains and losses from changes in fair value are recognised outside profit or loss in equity until the finan-cial asset is disposed of or until an impairment loss is established. In the event of an impairment loss, the ac-cumulated net loss is removed from equity and posted in the income statement.

Interests held in associated companies are measured at acquisition cost, as there is no active market and the fair values cannot be reliably determined due to the absence of corporate planning. Indicated impairment losses are recognised through profit or loss. At present, it is not intended for these interests to be disposed of.

First-time recognition of financial assets is always posted on the settlement date.

A financial asset is derecognised when the contractual right to cash inflows from the asset is satisfied, expires or all risks and rewards have essentially been transferred. Derecognition is also posted on the settlement date.

Financial assets are also derecognised if the essential risks and rewards associated with ownership are neither transferred to the acquirer nor retained as a result of transferring financial assets, and the power to dispose of the financial assets passes to the acquirer. The rights and duties arising or remaining after such transfer are recognised separately as an asset or liability. However, if the power to dispose of the transferred financial assets remains with the ALNO Group, the sold assets are still recognised in the amount of the continuing commitment. An associated liability is simultaneously posted under other liabilities. Differences between the assets and lia-bilities posted are recognised in the financial result.

Other assets are recognised at acquisition cost, liquid assets at their nominal value.

Available-for-sale assets

“Available-for-sale assets” are regarded as assets that can immediately be sold in their current state and for which the probability of sale is high. They are valued according to IFRS 5, and are reported as current. These may be individual non-current assets, an available- for-sale group of assets (disposal groups) or business areas which will be given up. Debts that are issued in a transaction together with assets form part of a disposal group or a given-up business area, and are also report-ed separately as current, as “Debts associated with avail-able-for-sale assets”. Available-for-sale non-current assets are no longer depreciated by the straight-line method, and are to be reported at their book value or their fair value less costs to sell, whichever is the lower value. Profits or losses from the valuation of given-up business areas at the fair value less costs to sell are reported as profit / loss from non-continued activities, like the profits / losses from business activity or from the sale of these business areas. In contrast, profits or losses from the valuation of individual available-for-sale assets and from disposal groups are reported in the profit / loss from continued activities until the point when they are definitively sold.


Provisions for pensions

The ALNO Group operates a defined benefit plan for former members of the Board of Management and executive employees in Germany and abroad.

ALNO’s benefit plan and the AFP benefit plan (pension fund foundation and management pension scheme) and the ALNO Schweiz benefit plan are defined benefit plans in compliance with IAS 19.27 directly obligating the company to pay agreed benefits to past and present employees (m/w); actuarial risks and investment risks are basically borne by the company. The provision is calcu-lated using the method of regular lump-sum premiums (projected unit credit method) defined by IAS 19 insofar as it is not covered by existing plan assets.

In the case of AFP and ALNO Schweiz, employee con-tributions to the benefit plan are included with the “risk-sharing” method, i.e. the employee contributions are taken into account as negative benefits in the cal-culations according to IAS 19.70.

The actuarial interest rate is set on the basis of rates of return achieved on the balance sheet date for first-class, fixed-income corporate bonds.

The net interest cost is reported under the financial ex-penses. Current and past service costs are reported under personnel costs.

The Group nets all actuarial gains and losses accruing in the financial year as well as deferred tax liabilities in-curred on these with equity outside profit or loss. Disso-lution recognised as income in subsequent periods is not carried out, in accordance with IAS 19. The amounts recorded in the year under review are represented sep-arately in the statement of comprehensive income.

The net interest costs result from multiplying the discount interest rate calculated at the start of the financial year by the performance obligation less the product of the discount rate and plan assets. The discount rates used for the performance obligation and plan assets match one another.

Other provisions

Other provisions are set up in compliance with IAS 37 if a current – legal and constructive – obligation towards third parties is probable and can lead to a reliably esti-mated outflow of resources. Provision for expenditure is generally not formed.

Measurement is performed in the amount of the best estimate of the expenditure required to settle the obli-gation on the balance sheet date. Non-current provisions are recognised at their settlement value discounted to the balance sheet date in accordance with IAS 37, in sofar as the effect from the interest rate is substantial. In the event of discounting, the increase in the provision due to the passage of time is recognised as a financial expense.

Financial liabilities

The option of classifying financial liabilities as financial liabilities to be measured at fair value through profit or loss when recognised for the first time is not exercised.

Financial liabilities essentially comprise shareholder loans, accounts payable to banks and other financial liabilities. In compliance with IAS 39, all financial liabilities are basically accounted for at their amortised cost of acquisition (financial liabilities measured at cost), which corresponds to the fair value of the consideration received, including transaction costs. Current financial liabilities regularly also include those non-current loans which have a remaining term of not more than one year.

The first time reporting of financial liabilities always takes place on the day when the obligation was entered into.

A financial liability is derecognised when the obligation underlying the liability is discharged, terminated or ex-tinguished.

Trade accounts payable and other liabilities

Trade accounts payable are recognised in the amount invoiced by the supplier.


The deferred liabilities are carried as liabilities in the amount owed, sometimes in the amount estimated, and recognised under other liabilities.

Liabilities under finance leases are likewise recognised under other liabilities and carried at the present value of the future leasing instalments. Liabilities are broken down into current and non-current liabilities in accordance with the term of the lease. Lease payments are divided into interest and principal in such a way as to yield a constant rate of interest on the remaining lease payment owed over the period. The interest portion is recorded under financial expenses.

Lease payments under operating leases are recognised in the consolidated income statement as an expense by the straight-line method over the term of the lease.

The other liabilities are shown at their repayment amounts.

A trade account payable or other liability is derecognised when the obligation underlying the liability is discharged, terminated or extinguished.

The company concludes individual forward exchange transactions for exchange rate hedging. The precondi-tions for hedge accounting are not met.

5. Assumptions and estimates

When preparing the consolidated financial statements, assumptions and estimates have been made with impact on recognition and the amount of the assets, liabilities, income, expenses and contingent liabilities reported.

When assuming a going concern, the assumptions and estimates essentially concern the corporate planning, as well as the occurrence and implementation of various conditions (see B.1. “Basis for preparation of the financial statements”).

The assumptions and estimates made in conjunction with impairment testing of the goodwill, a brand and fixed assets essentially concern the forecast cash flows and discounting factors (see B.4. “Impairment test for good-will” and C.8. “Depreciation on intangible assets and property, plant and equipment”).

Further uncertainties exist in conjunction with the capi-talisation of future tax reliefs, due to the assumptions made with regard to the expected date of occurrence of future taxable income in the next five years. Future tax reliefs have also been calculated on the assumption that there will be no harmful change of ownership in the future eliminating the tax loss carryforwards in accordance with Section 8c of the Corporation Tax Act (KStG) (see C.10. “Income taxes”).

Assumptions and estimates are also made when deter-mining the economic useful life of the fixed assets (see B.4. “Intangible assets” and “Property, plant and equip-ment”), as well as when determining the parameters for calculating the provisions for pensions (see D.12. “Provi-sions for pensions”) and pre-retirement part-time working arrangements (see D.13. “Other provisions”). The pro-vision for warranty claims has been calculated on the basis of assumptions and estimates concerning the period of time between delivery date and warranty period, as well as on the future warranty encumbrances (see D.13. “Other provisions”). Valuation allowances on trade accounts receivable are likewise based on esti-mates concerning, in particular, the cash inflow expect-ed in the future (see D.6. “Trade accounts receivable”).

The discount factors for determining the present values of defined-benefit pension obligations are based on the returns achieved for high-quality, fixed-interest corporate bonds on the respective markets at the balance sheet date. The portfolio has been expanded since 2012 as a result of market changes in the high-value corporate bonds used as the basis for calculating the actual inter-est rate. Since that point, bonds rated AA by at least one rating agency have been included. The minimum volume for consideration was also reduced to € 50 million and information from corporate bonds with a rating of A was also taken into account following deduction of the spread between AA and A.

These estimates and assumptions are based on prem-ises that reflect the knowledge available on the date when the consolidated financial statements are prepared. Although these assumptions and estimates are to the best of the management’s knowledge, the actual results may deviate from these.


C. NOTES TO THE CONSOLIDATED INCOME STATEMENT

The consolidated income statement has been prepared using the nature of expense method.

1. Sales revenue

Other revenue is essentially the result of product-related incidental sales involving the Group’s usual customers or involving other third parties, such as the sale of materials.

The fall in sales revenues is mainly the result of the deconsolidation of Impuls Küchen GmbH (“Impuls”). Adjusted for this effect, the ALNO Group would report an increase in sales of 3.7% (€ 18,638 thousand).

2. Changes in inventories and capitalised goods and services for own account

in € 000 2015 2014

Revenue from the sale of goods 502,589 535,152

Other revenue 18,916 10,622

TOTAL 521,505 545,774

in € 000 2015 2014

Changes in inventories −4,508 −447

Other capitalised goods and services for own account 1,223 1,040

TOTAL −3,285 593

3. Other operating income

Other operating income is made up as follows:

Other operating income is heavily influenced by the sale of Impuls in 2015. Income from the sale of Impuls Küchen GmbH contains the proceeds from the sale of shares in the amount of € 18,000 thousand as well as the subse-quent purchase price adjustment in the amount of € 5,968 thousand and the counter-effects from the deconsolidation of assets and liabilities in the amount of € 4,111 thousand. The sale of properties, buildings and machinery owned by Impuls in the amount of € 8,372 thousand is reported under income from the disposal of assets.

In the previous year, exchange gains included netting against currency losses in the amount of € 1,589 thou-sand.

Income relating to other periods mainly comprises in-come from the reversal of provisions, as well as from derecognition of liabilities.

Rental income primarily comprises the income received from letting office and business premises to various ten-ants at the Bad Salzuflen location as well as rents from interchangeable truck bodies.

in € 000 2015 2014

Income from the sale of Impuls 19,857 0

Currency gains 8,932 794

Income from the disposal of assets 8,417 132

Revenue from the sale of rights to use 7,782 0

Income relating to other periods 1,485 1,425

Income from the reversal of specific valuation allowances 1,209 624

Insurance benefits received 489 167

Rental income 485 620

Badwill from the acquisition of AFP 0 71,306

Other income 9,544 3,149

TOTAL 58,200 78,217


In 2015, the other income primarily comprises: costs charged on to Impuls in the second half for distribution services of € 2,727 thousand (previous year: € 0 thousand), a payment received from an arrangement in bankruptcy of € 1,200 thousand (previous year: € 0 thousand), income from transactions with joint ventures of € 857 thousand (previous year: € 61 thousand), and in-come from the sale of the Impuls brand of € 485 thou-sand (previous year: € 0 thousand). As in the previous year, this item also comprises income from social ser-vices, refunds from the Federal Employment Agency, income from payments received on derecognised ac-counts receivable and grants or subsidies on advertising costs.

4. Cost of materials

The cost of materials quota, calculated as the cost of materials in relation to sales revenues amounted to 56.0% (previous year: 57.9%).

5. Personnel expenses

The item wages and salaries includes redundancy pay-ments in the amount of € 496 thousand (previous year: € 305 thousand) which are not associated with the reorganisation. Social security costs include the employ-er’s contributions to state pension funds for employees in the amount of € 8,829 thousand (previous year: € 8,769 thousand).

Defined benefit expenses for pensions at AFP Küchen AG increased from € 235 thousand in 2014 to € 2,356 thousand.

in € 000 2015 2014

Cost of raw materials and supplies 287,176 310,703

Purchased services 4,611 5,539

TOTAL 291,787 316,242

in € 000 2015 2014

Wages and salaries 114,500 118,978

Social security costs 19,412 18,918

Retirement benefits 2,517 357

TOTAL 136,429 138,253

€ 111 thousand (previous year: € 71 thousand) were re-cognised in the financial year as retirement benefit expenses on the basis of defined-contribution benefit obligations assumed by the employer for the company pension scheme.

2,199 men and women were employed on average over the year (previous year: 2,301)

The number of employees (m/w) has fallen on average by 114 as a result of the sale of Impuls Küchen GmbH on 30 June 2015 and the departure of 228 employees (m/w). Adjusted for Impuls, there was an increase in the number of employees.

6. Other operating expenses

Other expenses mainly comprise expenses from loss-es from cases of damage and from the allocation to provisions.

Number of employees 2015 2014

Industrial employees 1,116 1,272

Office employees 1,083 1,029

Total 2,199 2,301

Germany 1,599 1,654

Abroad 600 647

in € 000 2015 2014

Cost of sales 65,479 71,165

Administration costs 23,858 27,250

Rent and leasing 9,770 10,237

Maintenance 9,783 8,147

Exchange rate losses 5,974 0

Expenses relating to other periods 1,487 418

Allocation to individual valuation allowances on trade accounts receivable 1,080 546

Bad debts 929 1,099

Other taxes 853 1,495

Losses from the disposal of assets 491 544

Other expenses 214 306

TOTAL 119,918 121,207


7. Restructuring result (+ = expense / − = revenue)

In 2015, reorganisation yielded a negative result of € 13,515 thousand (previous year: € 8,925 thousand). This includes additional costs from the relocation of pro-duction of PIATTI kitchens from Dietlikon to Pfullendorf and relates to additional costs for material, personnel and assembly. Additional costs of this kind are not ex-pected in 2016. Additional personnel costs were in-curred because of the personnel adjustments required by centralisation.

8. Depreciation on intangible assets and property, plant and equipment

These write-downs result from the development of fixed assets.

in € 000 2015Reorga-nisation

2015 acc. to income statement

Cost of materials 292,444 −657 291,787

Personnel expenses 144,747 −8,318 136,429

Other operating expenses 124,458 −4,540 119,918

in € 000 2014Reorga-nisation

2014 acc. to income statement

Other operating income 80,097 −1,880 78,217

Personnel expenses 140,160 −1,907 138,253

Other operating expenses 130,105 −8,898 121,207

in € 000 2015 2014


Property, plant and equipment 14,557 16,525

Scheduled write-downs 17,516 23,249

Impairment losses 8,716 10,461

TOTAL 26,232 33,710

All in all, the following asset groups are affected by impairment losses:

The unscheduled write-downs on intangible assets re-sulted from impairment tests and related to PIATTI cus-tomer relations in the amount of € 8,356 thousand in 2015. In the previous year, they related to the PIATTI brand names in the amount of € 5,352 thousand and PIATTI customer relations in the amount of € 4,775 thousand.

There were no further events or circumstances leading to the recognition of income or expenses from impair-ment losses on the balance sheet date.

9. Financial result

in € 000 2015 2014


Technical equipment and machinery 360 334

TOTAL 8,716 10,461

in € 000 2015 2014

Interest expense from loans as well as credit and factoring lines −6,712 −6,108

Interest expense from bonds −5,651 −5,385

Interest expense from unwinding of discount on provisions −463 −772

Financial expenses −12,826 −12,265

Income from investments in securities 4 7

Interest income from financial assets 333 2,649

Financial income 337 2,656

Income from investments measured at equity −483 −2,946

TOTAL −12,972 −12,555


10. Income taxes

Breakdown of income taxes:

in € 000 2015 2014

Consolidated income statement

Actual income tax expense:

Deferred income tax expense 904 544

Adjustments of income tax actually incurred in the previous year 4 25

Deferred taxes:

Tax loss carryforwards −17,772 −1,976

Creation and reversal of temporary differences −3,183 −780

INCOME TAXES RECOGNISED IN THE CONSOLIDATED INCOME STATEMENT (+ = EXPENSE / − = REVENUE) −20,047 −2,187

in € 000 2015 2014

Consolidated statement of changes in equity

Deferred taxes directly recognised in equity:

Change in the value of securities recognised outside profit or loss 0 −3

Actuarial losses from pension provisions 138 1,620

INCOME TAXES RECOGNISED IN EQUITY 138 1,617


Deferred taxes comprise the following items:

in € 000

Consolidated statementof financial position

Consolidated incomestatement

2015 2014 2015 2014

Deferred tax liabilities

Intangible assets 7,424 9,223 −1,799 −2,535

Property, plant and equipment 7,114 8,041 −927 377

Inventories 322 413 −91 59

Accounts receivable and other assets 1,003 533 502 411

Other provisions 79 23 60 −29

Differences from currency translation 0 0 12 −11

Subtotal 15,942 18,233 −2,243 −1,728

Balance −15,217 −12,930 0 0

725 5,303 −2,243 −1,728

Deferred tax assets

Intangible assets 134 190 −56 −75

Property, plant and equipment 680 4 676 −24

Financial investments 2 2 0 0

Provisions for pensions 5,693 5,251 393 −171

Other provisions 208 24 200 −52

Other financial liabilities 0 0 0 −502

Other accounts payable 26 29 −3 −87

Loss carryforwards 26,821 9,049 17,772 1,976

Differences from currency translation 0 1 −270 −37

Subtotal 33,564 14,550 18,712 1,028

Valuation allowance 0 0 0 0

Subtotal 33,564 14,550 18,712 1,028

Balance −15,217 −12,930 0 0

18,347 1,620 18,712 1,028

DEFERRED TAX INCOME −20,955 −2,756


Expected and actual taxes on income are reconciled as follows:

The effective income tax rate – defined as 28% (previous year: 28%) in the ALNO Group – is obtained by applying a corporation tax rate of 15% (previous year: 15%) plus the solidarity surcharge of 5.5% of corporation tax and a weighted trade earnings tax to the profit / loss before income taxes.

For this reason, the deferred taxes of the German com-panies are calculated with the future income tax rate of 28%.

Foreign currency translation yields a change of € 12 thou-sand (previous year: € −11 thousand) in deferred tax liabilities. In the deferred tax assets, there is a change of € −270 thousand (previous year: € −37 thousand) from foreign currency translation.

in € 000 2015 2014

Result before income taxes −24,433 −6,308

Expected income taxes −6,841 −1,766

Effects of different assessment bases / tax rates −3,111 −14,265

Unrecognised losses in the financial year 3,407 9,423

Write-down or non-recognition of deferred tax assets on temporary differences −66 −46

Actually used tax loss carryforwards for which deferred taxes were formed −460 −96

Change in deferred tax assets on loss carryforwards −17,716 −1,028

Non-tax-deductible operating expenses 4,498 5,801

Tax effects due to circumstances in prior periods 3 25

Other differences 239 −235

Actual income taxes −20,047 −2,187

Income taxes recognised in the consolidated Income taxes −20,047 −2,187

Deferred tax assets in the amount of € 105 thousand (previous year: € 0 thousand) and deferred tax liabilities in the amount of € 36 thousand (previous year: € 0 thou-sand) were disposed of as a consequence of a subsidi-ary being deconsolidated. In the previous year, deferred tax assets in the amount of € 6,839 thousand and de-ferred tax liabilities in the amount of € 12,351 thousand were received from a company merger in which ALNO AG was the purchaser.

The corporation tax loss carryforwards in Germany for which deferred tax assets were not formed amount to € 131,361 thousand (previous year: € 183,021 thousand). Unrecognised German trade tax loss carryforwards total € 212,845 thousand as at the balance sheet date (previ-ous year: € 251,158 thousand). Deferred taxes have not


been capitalised for foreign loss carryforwards in the amount of € 20,797 thousand (previous year: € 1,644 thou-sand). Of these, € 20,504 thousand (previous year: € 1,324 thousand) can be used for a limited period of 20 years.

The interest carried forward on the basis of interest restrictions in Germany for which deferred tax assets were not formed amounts to € 36,210 thousand as at the balance sheet date (previous year: € 27,689 thousand).

Use of previously unrecognised tax loss carryforwards of € 460 thousand (previous year: € 0 thousand) and use of an interest carryforward, which was previously not recognised on account of the limited tax deductibility of interest expenses contributed € 0 thousand (unchanged on the previous year) to the income tax result recognised.

Deferred tax assets were formed on loss carryforwards amounting to € 18,217 thousand (previous year: € 888 thousand) for the tax group of ALNO AG. In this case, it was assumed that deferred tax assets on loss carryforwards are recoverable if they can be realised through future positive taxable results in the next five years. Positive taxable results for the tax group of ALNO AG are expected in the next five years on the basis of a sharp year-on-year increase in EBITDA (adjust-ed for special effects) and on the basis of the measures taken in 2015.

Deductible temporary differences for which deferred tax assets were not recognised due to impairment totalled € 0 thousand as in the previous year.

Due to the prolonged history of loss, trade tax loss carry-forwards of Gustav Wellmann GmbH & Co. KG, Enger, are only formed on temporary differences to the extent that deferred tax liabilities exceed deferred tax assets. This consequently increased the deferred tax assets recognised on loss carryforwards by € 69 thousand to € 616 thousand (previous year: € 547 thousand).

As in the previous year, no deferred tax assets were formed on loss carryforwards at ALNO UK Ltd., Leeds, UK, in 2015. Deferred tax assets were formed in the amount of € 4,751 thousand (previous year: € 6,097 thou-sand) on loss carryforwards of AFP Küchen AG, Arbon, Switzerland, on the basis of positive budgetary account-ing for the subsequent years. Deferred tax assets in the amount of € 1,257 thousand (previous year: € 0 thou-sand) were also formed on tax loss carryforwards of ALNO USA Corporation, New York, USA, and in the amount of € 1,980 thousand (previous year: € 1,517 thou-sand) on tax loss carryforwards of ALNO (Schweiz) AG, Nidau, Switzerland.

Tax deferrals in the amount of € 296 thousand (previous year: € 752 thousand) were not recognised on taxable temporary differences from interests held in subsidiaries and interests held in joint ventures in the total amount of € 21,123 thousand (previous year: € 53,731 thousand), as the time at which the temporary difference is reversed can be influenced by the parent company and the tem-porary difference will probably not be reversed within the foreseeable future.

Income taxes payable amount to € 448 thousand (pre-vious year: € 380 thousand), while € 29 thousand (pre-vious year: € 36 thousand) can be collected in income tax refunds.


D. NOTES TO THE CONSOLIDATED BALANCE SHEET1. Intangible assets

in € 000

Industrial property rights

and similar rights

Self-generated intangible

assets Goodwill

Down payments and

construction in progress Total

Accumulated cost of acquisition

Total as at 1 January 2014 26,296 1,902 6,290 2,963 37,451

Currency translation differences 47 0 134 0 181

Additions 292 0 377 399 1,068

Additions, scope of consolidation 61,144 0 0 0 61,144

Transfers −57 70 0 0 13

Disposals −9 0 0 0 −9

Removals from scope of consolidation −107 0 0 0 −107

Total as at 31 December 2014 87,606 1,972 6,801 3,362 99,741


Additions 2,535 0 389 475 3,399

Additions, scope of consolidation 0 0 0 0 0

Transfers 744 0 0 0 744

Disposals −765 0 0 0 −765

Removals from scope of consolidation −3,114 0 0 0 −3,114

TOTAL AS AT 31 DECEMBER 2015 87,513 1,972 7,345 3,837 100,667


Total as at 1 January 2014 24,860 253 2,607 0 27,720


Additions

Scheduled 6,593 131 0 0 6,724

Unscheduled 10,127 0 0 0 10,127


Transfers −283 283 0

Disposals −9 0 0 0 −9

Removals from scope of consolidation −105 0 0 0 −105

Total as at 31 December 2014 41,466 667 2,607 0 44,740


Additions

Scheduled 2,564 395 0 0 2,959

Unscheduled 8,356 0 0 0 8,356


Transfers 0 0 0 0 0

Disposals −765 0 0 0 −765

Removals from scope of consolidation −3,071 0 0 0 −3,071

TOTAL AS AT 31 DECEMBER 2015 48,948 1,062 2,607 0 52,617

Carrying amounts

31 December 2015 38,565 910 4,738 3,837 48,050

31 December 2014 46,140 1,305 4,194 3,362 55,001

1 January 2014 1,436 1,649 3,683 2,963 9,731


2. Property, plant and equipment

in € 000Land and buildings

Technical equipment

and machinery

Other plant, factory and

office equipment

Down payments and

construction in progress Total

Accumulated cost of acquisition

Total as at 1 January 2014 115,882 128,625 69,900 1,611 316,018


Additions 114 3,684 9,895 1,823 15,516

Additions, scope of consolidation 36,956 37,990 6,301 181 81,428

Transfers 18 1,759 −521 −1,269 −13

Disposals 1) −249 −26,137 −6,690 −182 −33,258

Removals from scope of consolidation −1,926 −1,202 −335 0 −3,463

Total as at 31 December 2014 151,020 144,857 78,743 2,164 376,784

Currency translation differences 2,986 1,928 1,027 171 6,112

Additions 495 4,398 7,770 869 13,532


Transfers 0 1,237 137 −2,118 −744

Disposals −13,225 −8,955 −7,321 0 −29,501

Removals from scope of consolidation 0 −16,734 −10,406 −222 −27,362



Total as at 1 January 2014 65,606 107,331 58,589 0 231,526


Additions

Scheduled 2,446 4,729 9,350 0 16,525

Unscheduled 0 334 0 0 334

Additions, scope of consolidation 16,788 25,276 3,982 0 46,046

Transfers 0 543 −543 0 0

Disposals 1) −249 −20,654 −6,155 0 −27,058

Removals from scope of consolidation −612 −1,031 −333 −1,976

Total as at 31 December 2014 84,053 116,669 65,025 0 265,747

Currency translation differences 1,875 1,311 591 0 3,777

Additions

Scheduled 2,524 3,423 8,610 0 14,557

Unscheduled 0 360 0 0 360


Write-ups 0 0 0 0 0

Transfers 0 0 0 0 0

Disposals −6,899 −8,364 −6,776 0 −22,039

Removals from scope of consolidation 0 −12,951 −8,688 0 −21,639


Carrying amounts

31 December 2015 59,723 26,283 11,717 864 98,587

31 December 2014 66,967 28,188 13,718 2,164 111,037

1 January 2014 50,276 21,294 11,311 1,611 84,492

1) € 20,413 thousand of the accumulated costs of acquisition was allocated to “available-for-sale assets” in 2014 and € 14,844 thousand of the cumulative depreciation was applied in the same way.


3. Financial investments

As at 31 December 2015, financial assets totalled € 381 thousand (previous year: € 998 thousand).

The financial assets chiefly comprise non-current secu-rities to protect commitments associated with employ-ees’ pre-retirement part-time working against insolvency, in the amount of € 258 thousand (previous year: € 885 thousand), which were pledged to the employees (m/w), as well as interests in associated companies in the amount of € 123 thousand (previous year: € 114 thou-sand). The fall is largely the result of the deconsolidation of Impuls in the amount of € 441 thousand.

4. At equity investments

The following joint ventures are included in the consolidat-ed financial statements according to the equity method:

ALNO China Holding Limited based in Hong Kong is a joint venture in which ALNO AG holds 45% of the shares. ALNO China Holding Limited was founded in

2012 and, as a sales company, controls the sales ac-tivities for kitchens of the ALNO Group in one of the largest growth markets in the world.

tielsa GmbH based in Pfullendorf is a joint venture in which ALNO AG holds 45.5% of the shares (previous year: 49%). The changes in the shares are due to the shareholders’ delayed capital increases. tielsa GmbH, which was founded in 2012, sells kitchens on the basis of the integration of SmartHome in the moving kitchen via special retailers.

ALNO AG holds 49% of the shares in “OOO Pervaya mebelnaya fabrika – ALNO” (referred to below as “1ffa” for 1 Furniture Factory – ALNO) based in St. Peters-burg. 1ffa will produce and sell kitchen furniture from 2016.

ALNO is involved in the joint management of the com-panies described above.

The following table shows select information from the statement of comprehensive income for the significant joint ventures (100% values):

ALNO China Holding Limited tielsa GmbHOOO Perwaja mebelnaja

fabrika – ALNO

in € 000 2015 2014 2015 2014 2015 2014

Sales revenue 3,641 4,360 674 103 0 0

Scheduled write-down 1,046 1,070 461 301 0 0

Interest income 0 0 0 0 0 0

Interest expenses −382 −342 23 78 0 0

Result before income taxes −1,971 −2,642 −2,358 −2,363 −183 0

Income taxes 0 −355 0 0 0 0

Income for the period −1,971 −2,997 −2,358 −2,363 −183 0

Other comprehensive income 73 0 0 0 0 0

OVERALL RESULT −1,898 −2,997 −2,358 −2,363 −183 0

Extract from the statement of comprehensive income


The following table shows the assets and liabilities of significant joint ventures (100% values), the reconciliation statement to the total carrying amount of the shares and the dividends received from joint ventures:

There are no contingent liabilities of ALNO AG towards these companies that are valued at equity.

ALNO China Holding Limited tielsa GmbHOOO Perwaja mebelnaja

fabrika – ALNO

in € 000 2015 2014 2015 2014 2015 2014

Non-current assets 7,035 7,575 1,208 1,234 3,052 0

Current assets 3,710 3,673 515 150 1,063 0

thereof: Liquid assets 544 951 106 10 5 0

TOTAL ASSETS 10,745 11,248 1,723 1,385 4,115 0

Non-current debts 6,225 6,221 1,000 0 0 0

thereof: non-current financial liabilities 0 0 1,000 0 0 0

Current debts 4,250 2,859 2,504 1,607 1,208 0

thereof: current financial liabilities 0 0 400 195 1,168 0

TOTAL BORROWED CAPITAL 10,475 9,080 3,504 1,607 1,208 0

Net assets 270 2,169 −1,781 −222 2,908 0

Group share in % book value of the shares 45 45 45.5 49 49 0

Book value of the shares before adjustments 122 976 0 0 1,425 0

Write-downs −122 −976 0 0 0 0

Consolidation effects 0 0 0 0 −704 0

Book values of the shares 0 0 0 0 721 0

Unrecognised partof the losses

for the reporting period −854 −1,349 −1,073 −1,158 0 0

Cumulative −2,980 −2,126 −3,225 −2,152 0 0

Dividends received 0 0 0 0 0 0

Additional financial information


5. Financial accounts receivable

The item contains loans amounting to € 3,100 thousand (previous year: € 2,895 thousand) to joint ventures. The non-current financial liabilities with a remaining term of over 5 years chiefly correspond to the conversion of accounts receivable trade into AFP loan receivables in connection with the sale of rights to use.

Furthermore, non-current financial accounts receivable chiefly comprise security for a provider of IT services in the amount of € 298 thousand (previous year: € 218 thou-sand) and earmarked credit balances with banks in the amount of € 474 thousand (previous year: € 474 thou-sand) for future investments. There were no indications at the closing date that these payment obligations would not be discharged.

There were neither adjusted nor overdue items in the financial accounts receivable with a gross value of € 13,061 thousand (previous year: € 3,739 thousand).

in € 000 Total

Remaining term

< 1 year1 to 5 years > 5 years

31 December 2015 13,062 400 3,480 9,182

31 December 2014 3,739 195 3,544 0

in € 000Carrying amount

Not impaired and overdue within the following periods

Net amount of adjusted accounts

receivable

Neither overdue nor

impairedLess than

30 days

between30 and

365 daysMore than 365 days

31 December 2015 61,361 638 45,341 3,595 9,792 1,993

31 December 2014 59,235 1,411 40,971 9,801 6,389 663

6. Trade accounts receivable

The ALNO Group sells accounts receivable which do not meet the criteria for complete derecognition. The total carrying amount of the original accounts receivable be-fore transfer amounts to € 11,200 thousand (previous year: € 15,531 thousand), the amount after transfer is € 4,270 thousand (€ 4,940 thousand). To an extent, there is a risk of late payment or default. The accounts receiv-able that were transferred but not yet derecognised are offset by accounts payable amounting to € 4,477 thou-sand (previous year: € 4,983 thousand) which are report-ed under other financial liabilities. Inpayments deriving from these accounts receivable must be passed on to the accounts receivable purchaser. The account payable is eliminated in this way. The transferred accounts re-ceivable function as collateral for the purchase price received in consideration of them. To a large extent, the fair values of these assets and liabilities correspond to their carrying amounts.

As at the balance sheet date, the age structure of the trade accounts receivable is as follows:

in € 000 Total

Remaining term


31 December 2015 61,361 60,383 978 0

31 December 2014 59,235 58,510 725 0


The adjusted accounts receivable have a gross value of € 5,112 thousand (previous year: € 8,471 thousand).

Write-downs on trade accounts receivable developed as follows:

With regard to the unimpaired trade accounts receivable, there were no indications at the closing date that these payment obligations would not be discharged.

Domestic trade receivables amounting to € 26,234 thou-sand (previous year: € 27,504 thousand) were netted in the amount of € 4,523 thousand (previous year: € 5,475 thousand) against domestic trade payables at a given offsetting situation. The balance sheet values of these trade receivables after netting amount to € 21,710 thousand (previous year: € 22,029 thousand).

7. Inventories

The aforementioned figures contain impairments which decreased by € 40 thousand (previous year: € 3,601 thou-sand) to € 4,922 thousand (previous year: € 4,962 thou-sand) in 2015.

in € 000 2015 2014

1 January 7,060 7,492

Currency differences 140 165

Consumption 1,010 202

Reversal 895 624

Allocation 523 575

Addition, scope of consolidation 4 882

Removal from scope of consolidation 1,348 1,228

31 DECEMBER 4,474 7,060

in € 00031 December

201531 December

2014

Raw materials and supplies 13,995 16,972

Work in progress 5,929 10,132

Finished goods and services 9,638 8,608

Down-payments received −739 −882

TOTAL 28,823 34,830

8. Other assets

Other current assets essentially comprise loan receiva-bles from third parties, prepaid expenses, turnover tax refunds as well as accounts receivable from employees (m/w) from time accounts.

Other non-current assets primarily comprise accounts receivable from the Federal Employment Agency in con-junction with pre-retirement part-time working.

Write-downs on other assets developed as follows:

The adjusted other assets have a gross value of € 531 thousand (previous year: € 152 thousand).

The unimpaired accounts receivable include overdue items amounting to € 124 thousand (previous year: € 1,300 thousand), for which there was, however, no need to undertake a valuation allowance.

9. Liquid assets

Liquid assets comprise the cash in hand and credit balances with banks. Non-disposable liquid assets principally comprise pledged bank deposits to secure bank credit lines. Bank sureties and insurance guaran-tees were secured with bank deposits amounting to € 173 thousand (previous year: € 331 thousand).

in € 000 Total

Remaining term


31 December 2015 12,307 11,876 431 0

31 December 2014 10,211 9,773 438 0

in € 000 2015 2014

1 January 134 111

Currency differences 3 0

Reversal 2 28

Allocation 168 13

Addition, scope of consolidation 0 38

31 DECEMBER 303 134


As at the balance sheet date, the cash fund (cash and cash equivalents) is made up as follows:

10. Available-for-sale assets

The machines released though the closure of PIATTI kitchens in Dietlikon are intended to be used for produc-tion of kitchens at the St. Petersburg plant.

These available-for-sale assets in the amount of € 3,620 thousand (€ 5,569 thousand) constitute technical systems and machines with a book value as at 31 De-cember 2015 in the amount of € 3,620 thousand (previ-ous year: € 5,387 thousand). In the previous year, down-payments on property, plant and equipment in the amount of € 182 thousand were included here.

11. Equity

a. Subscribed capital

The subscribed capital amounted to € 75,595 thousand as at 31 December 2015 (previous year: € 70,095 thou-sand) and is divided into 75,594,979 (previous year: 70,094,979) no-par-value shares. The shares are issued as bearer shares and fully paid up. Each no-par-value share accounts for € 1.00 of the subscribed capital.


201531 December

2014

Liquid assets 4,844 2,270

Not freely disposable liquid assets −211 −496

TOTAL 4,633 1,774

in € 000

Total as at 1 January 2014 70,095

Changes in 2014 0

Total as at 31 December 2014 70,095

Changes in 2015 5,500

TOTAL AS AT 31 DECEMBER 2015 75,595

On 30 March 2015, ALNO AG attracted Nature Home Holding Company Limited, Hong Kong, China (“Nature”), as a further anchor shareholder. As part of a capital in-crease for cash from the authorised capital, Nature took over 5.5 million new shares with shareholders’ subscrip-tion rights excluded. It was entered in the Register of Companies on 27 April 2015.

The most recent statutory notifications by shareholders pursuant to Section 21 subsection 1 of the German Se-curities Trading Act (WpHG) and their respective voting shares at the time of reaching, exceeding or undershoot-ing the reporting thresholds pursuant to Section 21 sub-section 1 of the German Securities Trading Act (WpHG) are set out below. Actual voting shares held at the bal-ance sheet date may differ as a result of non- notifiable acquisitions and / or disposals.

On 25 November 2015, Whirlpool Germany, GmbH, Stuttgart, Germany, notified ALNO AG in accordance with Section 21 subsection 1 of the Securities Trading Act (WpHG) that its voting share in ALNO AG, Pfullendorf, Germany, had fallen below the 15% voting rights thresh-old and, on the day of the notification, was 14.08% (corresponding to 10,643,995 voting rights).

On 25 November 2015, Whirlpool Corporation, Wilming-ton, Delaware, USA, notified ALNO AG in accordance with Section 21 subsection 1 of the Securities Trading Act (WpHG) that its voting share in ALNO AG, Pfullendorf, Germany, had fallen below the 15% voting rights thresh-old and, on the day of the notification, was 14.08% (corresponding to 10,643,995 voting rights). Of these, 14.08% (corresponding to 10,643,995 voting rights) are to be allocated to Whirlpool Corporation in accordance with Section 22 subsection 1 sentence 1 no. 1, subsec-tion 3 of the Securities Trading Act (WpHG) via Whirlpool Germany GmbH, a subsidiary of Whirlpool Corporation, the voting share in ALNO AG of which amounted to 3% or more.

The aforementioned notifications were published through Deutsche Gesellschaft für Ad-hoc-Publizität (DGAP) on 27 November 2015.

On 27 April 2015, SE Swiss Entrepreneur AG, Zug, Switzerland, notified ALNO AG in accordance with Sec-tion 21 subsection 1, sentence 1 of the Securities Trading Act (WpHG) that its voting share in ALNO AG, Pfullendorf had fallen below the threshold of 3% of the voting rights and on the date of notification amounted to 2.918% (cor-responding to 2,205,815 voting rights).


On 27 April 2015, Mr Christoph Dietsche, Zug, Switzer-land, notified ALNO AG in accordance with Section 21 subsection 1, sentence 1 of the Securities Trading Act (WpHG) that its voting share in ALNO AG, Pfullendorf had fallen below the threshold of 3% and on the date of notification amounted to 2.918% (corresponding to 2,205,815 voting rights). 2.918% of these (correspond-ing to 2,205,815 voting rights) are to be allocated to Mr Christoph Dietsche in accordance with Section 22 subsection 1, sentence 1, no. 1 of the Securities Trading Act (WpHG).

The aforementioned notifications were published through Deutsche Gesellschaft für Ad-hoc-Publizität (DGAP) on 5 May 2015.

On 21 December 2015, SE Swiss Entrepreneur AG, Zug, Switzerland, notified ALNO AG in accordance with Section 21 subsection 1 sentence 1 of the Securities Trading Act (WpHG) that its voting share in ALNO AG, Pfullendorf, Germany, had exceeded the 3% threshold and, on the day of the notification, was 3.004% (2,270,815 voting rights).

On 21 December 2015, Mr Christoph Dietsche, Zug, Switzerland, notified ALNO AG in accordance with Section 21 subsection 1, sentence 1 of the Securities Trading Act (WpHG) that its voting share in ALNO AG, Pfullendorf had exceeded the threshold of 3% and on the date of notification amounted to 3.004% (correspond-ing to 2,270,815 voting rights). 3.004% of these (corre-sponding to 2,270,815 voting rights) are to be allocated to Mr Christoph Dietsche in accordance with Section 22 subsection 1, sentence 1, no. 1 of the Securities Trading Act (WpHG).

The aforementioned notifications were published through Deutsche Gesellschaft für Ad-hoc-Publizität (DGAP) on 22 December 2015.

On 27 April 2015, Nature Home Holding Company Lim-ited, Hong Kong (Hong Kong Special Administrative Region of the People’s Republic China), notified ALNO AG in accordance with Section 21 subsection 1, sentence 1 of the Securities Trading Act (WpHG) that its voting share in ALNO AG, Pfullendorf had exceeded the threshold of 3 and 5% of the voting rights and amounted to 9.09% on this date (corresponding to 6,875,000 voting rights).

On 27 April 2015, Mr Se Hok Pan, Macau (Special Administrative Region of the People’s Republic China), notified ALNO AG in accordance with Section 21

subsection 1 sentence 1 of the Securities Trading Act (WpHG) that his voting share in ALNO AG, Pfullendorf, exceeded the threshold of 3% and 5% of the voting rights and amounted to 9.09% on this date (6,875,000 voting rights). Of these, 9.09% (6,875,000 voting rights) are to be allocated to Mr Se Hok Pan in accordance with Sec-tion 22 subsection 1 sentence 1 no. 1 of the Securities Trading Act (WpHG) via Nature Home Holding Company Limited, Hong Kong, a subsidiary of Mr Se Hok Pan.

On 27 April 2015, Ms Un Son I, Macau (Special Admin-istrative Region of the People’s Republic China), notified ALNO AG in accordance with Section 21 subsection 1, sentence 1 of the Securities Trading Act (WpHG) that her voting share in ALNO AG, Pfullendorf had exceeded the threshold of 3% and 5% of the voting rights and amounted to 9.09% on this date (6,875,000 voting rights). Of these, 9.09% (6,875,000 voting rights) are to be allo-cated to Ms Un Son I in accordance with Section 22 subsection 1 sentence 1 no. 1 of the Securities Trading Act (WpHG) via Nature Home Holding Company Limited, Hong Kong, a subsidiary of Ms Un Son I.

On 27 April 2015, Ms Se Ka Chon, Macau (Special Administrative Region of the People’s Republic China), notified ALNO AG in accordance with Section 21 sub-section 1, sentence 1 of the Securities Trading Act (WpHG) that her voting share in ALNO AG, Pfullendorf had exceeded the threshold of 3% and 5% of the voting rights and amounted to 9.09% on this date (6,875,000 voting rights). Of these, 9.09% (6,875,000 voting rights) are to be allocated to Ms Se Ka Chon in accordance with Section 22 subsection 1 sentence 1 no. 1 of the Securi-ties Trading Act (WpHG) via Nature Home Holding Com-pany Limited, Hong Kong, a subsidiary of Ms Se Ka Chon.

On 27 April 2015, Mr Se Ka Chun, Macau (Special Ad-ministrative Region of the People’s Republic China), notified ALNO AG in accordance with Section 21 sub-section 1, sentence 1 of the Securities Trading Act (WpHG) that his voting share in ALNO AG, Pfullendorf had exceeded the threshold of 3% and 5% of the voting rights and amounted to 9.09% on this date (6,875,000 voting rights). Of these, 9.09% (6,875,000 voting rights) are to be allocated to Mr Se Ka Chun in accordance with Section 22 subsection 1 sentence 1 no. 1 of the Securities Trading Act (WpHG) via Nature Home Holding Company Limited, Hong Kong, a subsidiary of Mr Se Ka Chun.

On 27 April 2015, Mr Se Ka Wai, Macau (Special Admin-istrative Region of the People’s Republic China), notified ALNO AG in accordance with Section 21 subsection 1,


sentence 1 of the Securities Trading Act (WpHG) that his voting share in ALNO AG, Pfullendorf had exceeded the threshold of 3% and 5% of the voting rights and amounted to 9.09% on this date (6,875,000 voting rights). Of these, 9.09% (6,875,000 voting rights) are to be allo-cated to Mr Se Ka Wai in accordance with Section 22 subsection 1 sentence 1 no. 1 of the Securities Trading Act (WpHG) via Nature Home Holding Company Limited, Hong Kong, a subsidiary of Mr Se Ka Wai.

On 27 April 2015, Ms Se Ka Ian, Macau (Special Admin-istrative Region of the People’s Republic China), notified ALNO AG in accordance with Section 21 subsection 1, sentence 1 of the Securities Trading Act (WpHG) that her voting share in ALNO AG, Pfullendorf had exceeded the threshold of 3% and 5% of the voting rights and amount-ed to 9.09% on this date (6,875,000 voting rights). Of these, 9.09% (6,875,000 voting rights) are to be allo cated to Ms Se Ka Ian in accordance with Section 22 subsec-tion 1 sentence 1 no. 1 of the Securities Trading Act (WpHG) via Nature Home Holding Company Limited, Hong Kong, a subsidiary of Ms Se Ka Ian.

On 27 April 2015, Weng Hou Investment Company Limited, Macau (Special Administrative Region of the People’s Republic China), notified ALNO AG in accord-ance with Section 21 subsection 1, sentence 1 of the Securities Trading Act (WpHG) that its voting share in ALNO AG, Pfullendorf had exceeded the threshold of 3% and 5% of the voting rights and amounted to 9.09% on this date (6,875,000 voting rights). Of these, 9.09% (6,875,000 voting rights) are to be allocated to Weng Hou Investment Company Limited in accordance with Sec-tion 22 subsection 1 sentence 1 no. 1 of the Securities Trading Act (WpHG) via Nature Home Holding Company Limited, Hong Kong, a subsidiary of Weng Hou Invest-ment Company Limited.

On 27 April 2015, Freewings Development Co., Ltd., Tortola (British Virgin Islands), notified ALNO AG in accordance with Section 21 subsection 1, sentence 1 of the Securities Trading Act (WpHG) that its voting share in ALNO AG, Pfullendorf had exceeded the threshold of 3% and 5% of the voting rights and amounted to 9.09% on this date (6,875,000 voting rights). Of these, 9.09% (6,875,000 voting rights) are to be allocated to Free-wings Development Co., Ltd. in accordance with Sec-tion 22 subsection 1 sentence 1 no. 1 of the Securities Trading Act (WpHG) via Nature Home Holding Company Limited, Hong Kong, a subsidiary of Freewings Develop-ment Co., Ltd.


On 13 May 2015, Cognis S.a.r.l., Luxembourg, Luxem-bourg, notified ALNO AG in accordance with Section 21 subsection 1, sentence 1 of the Securities Trading Act (WpHG) that its voting share in ALNO AG, Pfullendorf had exceeded the threshold of 3% of the voting rights and amounted to 3.19% on this date (corresponding to 2,408,690 voting rights).

On 13 May 2015, Ffenics I Fund LP, George Town, Cayman Islands, notified ALNO AG in accordance with Section 21 subsection 1, sentence 1 of the Securities Trading Act (WpHG) that its voting share in ALNO AG, Pfullendorf had exceeded the threshold of 3% of the voting rights and amounted to 3.19% on this date (2,408,690 voting rights). Of these, 3.19% (2,408,690 voting rights) are to be allocated to Ffenics I Fund LP in accordance with Section 22 subsection 1 sentence 1 no. 1 of the Securities Trading Act (WpHG) via Cognis S.a.r.l., Luxembourg, a subsidiary of Ffenics I Fund LP.

On 13 May 2015, Cognis II General Partner, George Town, Cayman Islands, notified ALNO AG in accordance with Section 21 subsection 1, sentence 1 of the Securi-ties Trading Act (WpHG) that its voting share in ALNO AG, Pfullendorf had exceeded the threshold of 3% of the voting rights and amounted to 3.19% on this date (2,408,690 voting rights). Of these, 3.19% (2,408,690 voting rights) are to be allocated to Cognis II General Partner in accordance with Section 22 subsection 1 sentence 1 no. 1 of the Securities Trading Act (WpHG) via Ffencis I Fund LP, George Town, Cayman Islands, a subsidiary of Cognis II General Partner.

On 20 May 2015, Cognis S.a.r.l., Luxembourg, Luxem-bourg, notified ALNO AG in accordance with Section 21 subsection 1, sentence 1 of the Securities Trading Act (WpHG) that its voting share in ALNO AG, Pfullendorf had fallen below the threshold of 3% of the voting rights and amounted to 0% on this date (corresponding to 0 voting rights). The voting rights had been transferred to the parent company, Ffenics I Fund LP, George Town, Cay-man Islands, and are held by the latter.



On 13 May 2015, Paul Capital PCTS Holdings LP, San Francisco, USA, notified ALNO AG in accordance with Section 21 subsection 1, sentence 1 of the Securities Trading Act (WpHG) that its voting share in ALNO AG, Pfullendorf, Germany had exceeded the threshold of 3% of the voting rights and amounted to 3.19% on this date (corresponding to 2,408,690 voting rights). Of these, 3.19% (2,408,690 voting rights) are to be allocated to Paul Capital PCTS Holdings LP in accordance with Section 22 subsection 1 sentence 1 no. 1 of the Securities Trading Act (WpHG) via Ffenics I Fund LP, Cayman Islands, and Cognis S.a.r.l., Luxembourg, subsidiaries of Paul Capital PCTS Holdings LP.

On 13 May 2015, Paul Capital Partners IX LP, San Francisco, USA, notified ALNO AG in accordance with Section 21 subsection 1, sentence 1 of the Securities Trading Act (WpHG) that its voting share in ALNO AG, Pfullendorf, Germany had exceeded the threshold of 3% of the voting rights and amounted to 3.19% on this date (corresponding to 2,408,690 voting rights). Of these, 3.19% (2,408,690 voting rights) are to be allocated to Paul Capital Partners IX LP in accordance with Section 22 subsection 1 sentence 1 no. 1 of the Securities Trading Act (WpHG) via Paul Capital PCTS Holdings LP, USA, Ffenics I Fund LP, Cayman Islands, and Cognis S.a.r.l., Luxembourg, subsidiaries of Paul Capital Partners IX LP.

On 13 May 2015, Paul Capital IX Management LP, San Francisco, USA, notified ALNO AG in accordance with Section 21 subsection 1, sentence 1 of the Securities Trading Act (WpHG) that its voting share in ALNO AG, Pfullendorf, Germany had exceeded the threshold of 3% of the voting rights and amounted to 3.19% on this date (corresponding to 2,408,690 voting rights). Of these, 3.19% (2,408,690 voting rights) are to be allocated to Paul Capital IX Management LP in accordance with Sec-tion 22 subsection 1 sentence 1 no. 1 of the Securities Trading Act (WpHG) via Paul Capital Partners IX LP, USA, Paul Capital PCTS Holdings LP, USA, Ffenics I Fund LP, Cayman Islands, and Cognis S.a.r.l., Luxembourg, subsidiaries of Paul Capital IX Management LP.

On 13 May 2015, Paul Capital Fund Management LLC, San Francisco, USA, notified ALNO AG in accordance with Section 21 subsection 1, sentence 1 of the Securi-ties Trading Act (WpHG) that its voting share in ALNO AG, Pfullendorf, Germany had exceeded the threshold of 3% of the voting rights and amounted to 3.19% on this date (corresponding to 2,408,690 voting rights). Of these,

3.19% (2,408,690 voting rights) are to be allocated to Paul Capital Fund Management LLC in accordance with Sec-tion 22 subsection 1 sentence 1 no. 1 of the Securities Trading Act (WpHG) via Paul Capital IX Management LP, USA, Paul Capital Partners IX LP, USA, Paul Capital PCTS Holdings LP, USA, Ffenics I Fund LP, Cayman Islands, and Cognis S.a.r.l., Luxembourg, subsidiaries of Paul Capital Fund Management LLC.

The aforementioned notifications were published through Deutsche Gesellschaft für Ad-hoc-Publizität (DGAP) on 17 June 2015.

On 13 October 2015, Mr Max Müller, Switzerland, notified ALNO AG in accordance with Section 21 subsection 1 of the Securities Trading Act (WpHG) that his voting share in ALNO AG, Pfullendorf had exceeded the threshold of 3% of the voting rights and on the date of notification amounted to 3.49% (corresponding to 2,639,122 voting rights). 0.75% of the voting rights (corresponding to 569,122 voting rights) are to be allocated to Mr Müller in accordance with Section 22 subsection 1, sentence 1, no. 1 of the Securities Trading Act (WpHG).

The aforementioned notification was published through Deutsche Gesellschaft für Ad-hoc-Publizität (DGAP) on 16 October 2015.

On 21 December 2015, Mr Alexander Shestakov, Russia, notified ALNO AG in accordance with Section 21 subsec-tion 1, sentence 1 of the Securities Trading Act (WpHG) that his voting share in ALNO AG, Pfullendorf had exceed-ed the threshold of 3% and amounted to 3.004% on this date (corresponding to 2,270,815 voting rights).

The aforementioned notification was published through Deutsche Gesellschaft für Ad-hoc-Publizität (DGAP) on 22 December 2015.

Authorised capitalBy resolution of the ordinary general meeting of ALNO AG on 26 June 2013, the Board of Management was author-ised in a modification to the articles of incorporation to increase the company’s share capital once or several times until 25 June 2018 by up to € 35,047,489.00 through issuing up to 35,047,489 no-par-value ordinary shares in return for cash and / or non-cash contributions (authorised capital 2013). It was entered in the Register of Companies on 9 August 2013.


The Board of Management decided on 30 March 2015 to utilise the approved capital 2013 with the consent of the Supervisory Board, to increase the share capital of the company by € 5,500,000.00 from € 70,094,979.00 to € 75,594,979.00 by issuing 5,500,000 new no-par-value bearer shares, with shareholders’ subscription rights excluded, in return for cash contributions. It was entered in the Register of Companies on 27 April 2015.

The ordinary general meeting of ALNO AG on 2 June 2015 decided to cancel the existing authorised capital 2013.

By resolution of the ordinary general meeting of ALNO AG on 2 June 2015, the Board of Management was author-ised with the consent of the Supervisory Board to in-crease the company’s share capital once or several times until 1 June 2020 by up to € 37,797,489.00 through issuing up to 37,797,489 new no-par-value bearer shares in return for cash and / or non-cash contributions (authorised capital 2015). The Board of Management was authorised, with the consent of the Supervisory Board, to specify further details of the share rights, the condi-tions for issuing shares and for the realisation of this capital increase. The shareholders can exercise their statutory subscription right. The new shares can also be acquired by a single credit institute or several credit institutes or companies within the meaning of Sec-tion 186(5) Sentence 1 of the German Stock Corporations Act (AktG) with the obligation to offer them to share-holders for purchase (indirect stock options).

However, the Board of Management was authorised, with the consent of the Supervisory Board, to exclude the statutory subscription right of shareholders under the following circumstances:

for fractional amounts;

in capital increases in return for cash contributions up to an amount not exceeding 10% of the share capital at the time when this authority comes into effect or, if the share capital is lower at that time, when this authority is exercised, if the issue price of the new shares is not significantly below the market price of the correspondingly endowed shares already listed on the stock market within the meaning of Section 203 sub-section 1, sentence 1 and subsection 2 in conjunction with Section 186, subsection 3, sentence 4 of the Stock Corporation Act (AktG). The aforementioned 10 per-cent limit shall apply to shares that are purchased on

the basis of an authority from the ordinary general meeting and are sold in accordance with Section 71 subsection 1, no. 8, sentence 5 of the Stock Cor-poration Act (AktG) in conjunction with Section 186, subsection 3, sentence 4 AktG during the term of this authority. Furthermore, this limit applies to those shares that are to be issued in order to service bonds with option or conversion rights or obligations, if the bonds are issued with corresponding use of Section 186(3), Sentence 4 AktG with shareholders’ subscription rights excluded;

in capital increases in return for non-cash contribu-tions, to guarantee new shares for the purpose of direct or indirect acquisition of companies, parts thereof or investing in companies and other assets, including loans and other liabilities;

to the extent that it is necessary, to grant the owners or creditors of bonds with option or conversion rights or obligations issued by the company or its subordinate Group companies a subscription right to new shares commensurate with that accruing after exercising their option or conversion rights or following the discharge of the option or conversion obligations.

The authorised capital 2015 was entered in the Register of Companies on 2 July 2015.

Conditional capitalThe annual general meeting on 26 June 2013 authorised the Board of Management to issue cum-warrant and / or convertible bonds, participatory rights and / or partici-pating bonds (or combinations of these instruments) (referred to jointly as “bonds”) in the total amount of up to € 100,000,000.00 up to 25 June 2018, and has cre-ated conditional capital in the amount of € 35,047,489.00 (conditional capital 2013) for this purpose. The aforemen-tioned authorisation from 26 June 2013 was used in March 2014 by the issue of convertible bonds in the total amount of € 14,000,000.00 (“convertible bond 2014”). In view of the conversion price defined in the bond condi-tions of the convertible bond 2014 amounting to € 2.00 per share, the conditional capital 2013 must be main-tained in an amount of € 7,000,000.00 to secure the holders of the convertible bond 2014 and the authori-sation of 26 June 2013 (corresponding to 7,000,000 no-par-value ordinary shares of the company with a pro rata amount of the capital stock of € 1.00 per share).


The remaining framework for the conditional capital 2013 has been opened for an amount of € 21,000,000.00 for further conversion and subscription rights which can be issued on the basis of the new authorisation by the an-nual general meeting on 28 May 2014, up to 27 May 2019. Accordingly, the decision taken by the annual general meeting on 26 June 2013 regarding the creation of the conditional capital 2013 (taking account of the reduction in the conditional capital 2013 described below) was re-adapted to such an extent that the conditional capital 2013 is also available for safeguarding the holders of cum-warrant and / or convertible bonds, participatory rights and / or participating bonds (or combinations of these instruments) which are issued on the basis of the authorisation approved by the annual general meeting on 28 May 2014.

The adjusted conditional capital 2013 was entered in the Register of Companies on 28 July 2014 and was newly specified as follows: The capital stock has been condi-tionally increased up to € 28,037,993.00 by the issue of up to 28,037,993 no-par-value ordinary shares (condi-tional capital 2013). The conditional capital increase will only be undertaken to such an extent as the holders or creditors of cum-warrant and / or convertible bonds, participating bonds and / or participatory right with cum-warrant and / or conversion rights or option and conversion obligations (or combinations of these instru-ments) that the company or its Group companies issued in March 2014 on the basis of the authorisation decision by the annual general meeting on 26 June 2013, or will be issued up to 27 May 2019 according to the authori-sation of the annual general meeting on 28 May 2014, exercise their option or conversion rights deriving from these bonds or discharge their conversion / option obli-gation, and in each of these cases to the extent that the conditional capital 2013 is required according to the provisions of the bond terms. The new shares are issued in accordance with the aforementioned authorisation decisions at a specific option or conversion price in each case. The new shares participate in profits from the start of the financial year in which no decision has been taken regarding the use of the net profit at the time when they were issued. The Board of Management is authorised to specify further details, with the consent of the Super-visory Board, concerning the realisation of this condi-tional capital increase.

Furthermore, the annual general meeting of ALNO AG on 28 May 2014 decided on authorising the issue of up to 7,009,496 share options to members of the Board of Management of the company, selected managers below Board of Management level in the company as well as members of the managing boards of companies asso-ciated with the company, in accordance with Sections 15 ff. of the Stock Corporation Act (AktG). The no- par-value bearer shares of the company, in up to 7,009,496 in number, required for fulfilling the share option rights will be granted by a conditional capital 2014. To create the conditional capital 2014, the existing conditional cap-ital 2013 was reduced by € 7,009,496.00 to the amount of € 28,037,993.00. The reduction in the conditional cap-ital 2013 was required because the nominal amount of the conditional capital was not allowed to exceed half of the capital stock on hand at the time when the decision regarding the conditional capital increase was taken. Also, following the reduction in the conditional capital 2013, the subscription rights of the holders of the con-vertible bond 2014 are fully covered.

The annual general meeting of ALNO AG on 28 May 2014 therefore decided to increase conditionally the capital stock by up to € 7,009,496 by issuing up to 7,009,496 no-par-value ordinary shares (conditional capital 2014). The conditional capital increase exclusively serves to grant rights to the holders of share option rights from the share option programme 2014, which the Board of Management was authorised to issue by a decision of the annual general meeting on 28 May 2014. The con-ditional capital increase will only be undertaken to the extent that the holders of share option rights granted on the basis of the authorisation by the annual general meeting on 28 May 2014 exercise these option rights and the company does not fulfil the share option rights through cash payment. The new shares participate in profits from the start of the financial year in which no decision has been taken by the Annual General Meeting regarding the use of the net profit at the time when they were issued. The Board of Management of ALNO AG is entitled to define the further details for undertaking the conditional capital increase, with the approval of the Supervisory Board, in the event that share option rights and shares are to be issued to members of the Board of Management of the company; in this case, the Super-visory Board defines the further details for carrying out the conditional capital increase. It was entered in the Register of Companies on 28 July 2014.


The ordinary general meeting of ALNO AG on 2 June 2015 approved an increase in the conditional capital 2013 from € 28,037,993.00 to € 30,787,993.00. The in-crease in the conditional capital 2013 was entered in the Register of Companies on 2 July 2015. The increase in the conditional capital 2013 was made possible by the increase in the share capital decided by the Board of Management on 30 March 2015 with the consent of the Supervisory Board.

To this extent, the remaining framework for the condi-tional capital 2013 should be opened for an amount of € 23,787,993.00 for further conversion and subscription rights which can be issued on the basis of the following proposed authorisation up to 1 June 2020.

By resolution of the ordinary general meeting of ALNO AG on 2 June 2015, the authorisation given to the Board of Management on 28 May 2014 to issue cum-warrant and / or convertible bonds, participatory rights and / or participating bonds was cancelled.

By decision of the ordinary general meeting of ALNO AG on 2 June 2015, the Board of Management was author-ised to issue, once or several times until 1 June 2020, cum-warrant and / or convertible bonds, participatory notes and / or participating bonds (or combinations of these instruments) in the total amount of up to € 90,000,000.00 with or without limitation of maturities, and to grant the owners or creditors of the bonds option or conversion rights (also with conversion or option ob-ligation) to a total of 23,787,993 no-par-value ordinary shares of the company with a pro rata amount of the capital stock of up to € 23,787,993.00 in accordance with the more detailed provisions of the bond terms. The bonds can be issued in euros or – subject to limitation to the corresponding equivalent value – another legal foreign currency, such as that of an OECD country. They can also be issued by companies based within and outside Germany in which the company holds a direct or indirect majority stake. In this case, the Board of Management is entitled to take over the guarantee for the bonds on behalf of the company, and to grant the

owners of such bonds option or conversion rights (also with conversion or option obligation) for no-par-value ordinary shares of the company.

Acquisition of own sharesThe authorisation issued by the ordinary general meeting on 23 June 2010 to acquire own shares was cancelled.

According to a resolution by the ordinary annual general meeting on 2 June 2015, the Board of Management was authorised according to Section 71, subsection 1, no. 8 of the Stock Corporation Act (AktG) to purchase the company’s shares for any permitted purpose within the limits of statutory restrictions and in line with the following provisions, in the amount up to 10% of the company’s share capital at the time when the resolution was taken by the annual general meeting or – if this value is lower – of the company’s share capital at the time when the aforementioned authorisation is exercised. The authori-sation is issued subject to the proviso that the shares purchased on the basis of this authorisation, taken together with other shares of the company that the company has already purchased and still owns or which are to be attributed to the company according to Sec-tions 71d and 71e AktG, shall never exceed the calcu-lated amount of 10% of the share capital in question. The authorisation may be exercised in whole or in part, on one or more occasions, individually or collectively by the company or by companies subordinate to it as defined by Section 17 AktG or by third parties authorised by the company or by companies subordinate to it as defined by Section 17 AktG. This authorisation remains valid until 1 June 2020.


b. Capital reserve

The capital reserve developed as follows in the year under review:

In conjunction with the simplified capital reduction of 12 October 2012, up to € 1,058 thousand from the capital reserve existing at the time were used to cover losses. In conjunction with the capital increase effected on 21 November 2012, the surplus of € 2,200 thousand ex-ceeding the nominal amount was allocated to the capital reserve. In the case of the capital increase for cash on 30 March 2015, the surplus of € 275 thousand exceeding the nominal amount was allocated to the capital reserve.

c. Legal reserve

As in the previous year, no transfer to the legal reserve was made in the year under review, due to the net accu-mulated losses; this item thus remains at € 462 thousand.

d. Accumulated net income

With regard to the development of accumulated net in-come, we refer to the figures presented in the consolidat-ed statement of changes in equity and the consolidated statement of comprehensive income.

The accumulated net income includes generated Group equity, the reserve from currency translation and the other transactions recognised outside profit or loss.

in € 000

Total as at 1 January 2014 3,258

Changes in 2014 0

Total as at 31 December 2014 3,258

Changes in 2015 275

TOTAL AS AT 31 DECEMBER 2015 3,533

Generated Group equity comprises the accumulated consolidated income of the reporting periods, the waiv-ers of repayment given by the shareholders in previous years, accumulated transaction expenses for capital increases and the reserve from remeasurements when IFRS standards were applied for the first time.

The other transactions recognised outside profit or loss concern actuarial gains and losses from the provisions for pensions, changes in the fair value of securities and the deferred taxes associated with these in each case. The amounts recognised in the financial year 2015 are presented in the consolidated statement of comprehen-sive income.

e. Capital management

Group equity has changed from € −28,007 thousand as at 31 December 2014 to € −30,621 thousand as at 31 December 2015 and is now made up as follows:


201531 December

2014

Subscribed capital 75,595 70,095

Capital reserve 3,533 3,258

Legal reserve 462 462

Accumulated net income −110,217 −101,822

Minority shares 6 0

TOTAL −30,621 −28,007


The ALNO Group’s net financial liabilities are as follows:

As of 31 December 2015, the net indebtedness of the ALNO Group increased by € 5,165 thousand or 4.0% compared with the previous year’s reporting date.

The shareholder loans and other financial liabilities have increased primarily as a result of a new shareholder loan of € 5,000 thousand and the bond in the amount of € 5,613 thousand (nominal amount € 5,670 thousand) issued in November 2015. The increase in liquid assets is mainly due to the cash inflow from a loan by AFP Küchen AG in the amount of € 1,700 thousand in the last days of the 2015 financial year.

Overall, net financial liabilities in relation to total assets increased by 0.9 percentage points.

The shareholders’ equity for ALNO AG presented in the annual financial statements as at 31 December 2015 in accordance with the German Commercial Code (HGB) totals € 73,698 thousand (previous year: € 49,651 thou-sand). The increase in equity of € 24,047 thousand is attributable to the profit for the year of € 18,272 thousand (previous year: € 22,805 thousand) and to the capital increase for cash of € 5,775 thousand. Changes in eq-uity are monitored by ALNO AG on a monthly basis.

12. Provisions for pensions

The ALNO Group’s company pension scheme is essen-tially based on direct, defined-benefit pension commit-ments. As a rule, pensions are calculated according to


2015

Change

31 December 2014 in € 000 in %

Shareholder loans and other financial liabilities

non-current 119,414 91,152 28,262 31.0

current 19,679 40,202 −20,523 −51.0

139,093 131,354 7,739 5.9

Less liquid assets −4,844 −2,270 −2,574 > 100.0

NET FINANCIAL LIABILITIES 134,249 129,084 5,165 4.0

Balance sheet total 290,131 284,546 5,585 2.0

Net financial liabilities in % of total assets 46.3 45.4

the employee’s period of service and pensionable earn-ings. The aforementioned commitments are measured on the basis of actuarial assessments. These assess-ments are based on the applicable legal, economic and tax conditions in the country concerned. Valuation parameters were specifically applied for the countries concerned.

Provisions are measured according to the present value of entitlement (projected unit credit method) in com-pliance with the revised version of IAS 19, taking into account the future development. A discount rate of 2.3% (previous year: 1.8%) is applied in Germany, which ac-counts for the lion’s share of this provision, with 63.7% (previous year: 84.4%). The discount rate abroad for ALNO UK equals 3.6% (previous year: 3.4%) and for the Swiss companies 0.8% (previous year: 1.1%).

In Germany, existing commitments are measured with a rise of 0.0% and 1.0% (previous year: 0.0% and 1.0%) in wages and salaries and an average pension trend of 1.5% (previous year: 1.5%). The trend in wages and salaries abroad is assumed to be 0.0% and 2.8% (pre-vious year: 1.1% and 2.9%). Pensions abroad are as-sumed to increase by 0.0% and 5.0% (previous year: 0.0% and 5.0%). Average staff fluctuation is calculated for each specific plant and is set at 5.0% (previous year: 5.0%) in Germany. Outside Germany, a fluctuation rate


of 1.9% (previous year: 2.0%) is expected at ALNO UK and of 7.2% on average (previous year: 0.0%) at the Swiss companies Abroad, the plan assets comprise non- current investments in life insurance; in Germany, the plan assets are centrally invested through Allianz Global Investors. The precise composition as at the balance sheet dates is shown in the following table:

The plan assets are not used by the company.

In fact, the revenue from plan assets amounted to € 1,539 thousand (previous year: € 1,679 thousand).

The following figures have been recognised in the con-solidated income statement:

The current service cost is recognised as retirement benefit expenses. The net interest cost is reported under the financial expenses.

in € 000 2015 2014

Cash and cash equivalents 14,539 15,662

Equity instruments 14,339 12,296

Corporate bonds 16,674 13,373

Government bonds 662 587

Property 1,217 922

Reinsurance 513 522

Miscellaneous 6,836 2,228

54,780 45,590

in € 000 2015 2014

Current service costs 2,612 3,894

Net interest expense

Interest expense 1,139 1,869

Expected return on assets −648 −1,128

TOTAL NET INTEREST EXPENSE 491 741

3,103 4,635

The present value of entitlement is reconciled with the reported provision as follows:

The present value of defined benefit obligations has changed as follows:

in € 000 2015 2014

Present value of entitlement, benefit obligations financed from provisions 19,114 23,938

Present value of entitlement, fund-financed benefit obligations 65,788 50,149

Present value of entitlement, direct benefit obligations (DBO) 84,902 74,087

Fair value of plan assets −54,780 −45,590

PROVISIONS FOR PENSIONS 30,122 28,497

in € 000 2015 2014

Commitment at the start of each financial year 74,087 22,028

Changes in scope of consolidation 2,940 49,464

Interest expense 1,139 1,869

Current service costs 2,612 3,894

Contributions of the plan participants (employees) 1,976 1,689

Pension payments in the period −6,449 −4,928

Revaluations

Actuarial gains (−) or losses (+) from the amendment financial assumptions −958 7,599

Actuarial gains (−) or losses (+) from the amendment demographic assumptions 0 −56

Experience adjustments 3,717 187

TOTAL REVALUATION (OTHER OPERATING RESULT) 2,759 7,731

Settlement gains (−) or losses (+) 0 −8,696

Other plan administration costs 30 25

Currency translation differences 5,808 1,010

COMMITMENT AT THE END OF EACH FINANCIAL YEAR 84,902 74,087


The fair value of plan assets has developed as follows:

On the balance sheet date, the actuarial losses were € 14,471 thousand (previous year: € 12,603 thousand).

The following table shows the effects of the changes in significant actuarial assumptions on the present value of entitlement. In this case, each of the remaining parame-ters remains unchanged as a result of which any inter-actions between the assumptions made are not taken into account. The calculations were also carried out by experts on the basis of actuarial principles.

in € 000 2015 2014

Plan assets at the start of each financial year 45,590 1,458

Changes in scope of consolidation 3,398 48,331

Expected return on plan assets (interest income) 648 1,128

Employer’s contributions 2,373 2,025

Contributions of the plan participants (employees) 1,976 1,690

Pension payments made from plan assets −5,409 −3,776

Revaluations

Actuarial gains (+) or losses (−) from the amendment financial assumptions 891 551

TOTAL REVALUATION (OTHER OPERATING RESULT) 891 551

Settlement gains (+) or losses (−) 0 −6,771

Currency translation differences 5,313 954

PLAN ASSETS AT THE END OF EACH FINANCIAL YEAR 54,780 45,590

The weighted duration as at the balance sheet date is 14.4 (previous year: 14.6) years.

In 2016, it is expected that € 1.1 million of the retirement benefit payments will be due from the pension com-mitments.

The risks resulting from defined-benefit pension obliga-tions include actuarial risks such as the life expectancy on which the assumptions are based, and financial risk. Financial risks arise, for example, from market price risks which may have effects on the discount interest rate or inflation risks which may affect wage and salary increases. The ALNO Group does not insure risks of this type.

in € 000 2015 2014

Discount interest rate

Increase by 0.5% −5,603 −5,020

Decrease by 0.5% 6,400 5,729

Pension trend

Increase by 0.5% 1,122 1,503

Decrease by 0.5% −1,033 −1,378

Life expectancy

Increase by 1 year 1,865 1,532

Decrease by 1 year −1,845 −1,515


13. Other provisions

The provisions for personnel costs essentially comprise provisions for the pre-retirement part-time working ar-rangements customary in Germany. The provision for pre-retirement part-time working encompasses expens-es for wage and salary payments to employees (m/w) in the off-work phase (settlement backlog) and the addi-tional increases required for the entire remaining duration of pre-retirement part-time working. A discount rate of 0.5% (previous year: 0.5%) is taken into account when calculating the provision. An amount of € 19 thousand (previous year: € 184 thousand) is posted under other non-current assets for the refunds to be expected from the Federal Employment Agency in conjunction with rights under the German Act on Pre-retirement Part-time Working (AltTZG).

The provision for warranties, damages and contingent losses encompasses free deliveries on account of faulty goods, missing parts and other defects which are meas-ured at production cost. At the same time, the provision also covers risks in conjunction with claims for damages by customers and suppliers; these are recognised at their expected value.

in € 0001 January

2015

Disposal scope of consoli-

dation Utilisation Reversal Transfer AllocationAccrued interest

Currency differ-ence

31 December 2015

Non-current provisions

Personnel costs 605 −464 −27 −98 111 4 1 0 132

Storage 330 −29 −1 0 0 0 0 0 300

935 −493 −28 −98 111 4 1 0 432

Current provisions

Warranties, damages and contingent losses 3,621 −12 −2,848 −187 0 3,907 0 62 4,543

Reorganisation 3,042 0 −3,042 0 0 2,301 0 382 2,683

Personnel costs 1,039 0 −615 −88 −111 307 0 8 540

Taxes 659 0 −327 0 0 0 0 0 332

8,361 −12 −6,832 −275 −111 6,515 1 452 8,098

TOTAL 9,296 −505 −6,860 −373 0 6,519 1 452 8,530

The reorganisation provision chiefly contains costs for the reduction in personnel required by centralisation.

The non-current provisions relating to pre-retirement part-time working arrangements will for the most part be consumed within the next two years. The other non- current personnel provisions and the provision for safe storage will be consumed within the next ten years.

14. Shareholder loans

Financial liabilities in the amount of € 43,125 thousand (previous year: € 30,000 thousand) in total existed in the financial year, in the form of loans granted by the share-holders of ALNO AG, of which € 1,500 thousand are reported as current. They consist of loans from Bauknecht Hausgeräte GmbH in the amount of € 35,000 thousand (previous year: € 30,000 thousand) and loans from Comco Holding AG in the amount of € 8,125 thousand (previous year: € 8,125 thousand). The loans from Com-co Holding AG were still reported under other current financial liabilities in 2014.


15. Other financial liabilities

The accounts payable to banks contain several loans totalling € 20,060 thousand (previous year: € 24,144 thou-sand). The interest rates for the investment loans are between 1.8% and 6.5%. The loans are repaid quarterly in some cases. The other loans are repaid at the end of their term.

The other financial liabilities include € 43,682 thousand for the bond issued in May 2013, € 13,359 thousand for the bond issued in March 2014 and € 5,613 thousand for the bond issued in November 2015 as well as liabilities from factoring of € 4,477 thousand.

The accounts payable to banks are secured through the transfer of real estate and buildings, machinery and tech-nical equipment by way of security. Furthermore, in-tangible assets, inventories, trade receivables and other assets in the UK were pledged for ALNO UK’s factoring.

in € 000

31 December 2015Total

Remaining term

< 1 year

1 to 5 years

> 5 years

Accounts payable to banks 20,060 6,698 13,362 0

Other financial liabilities 75,908 11,481 64,427 0

TOTAL 95,968 18,179 77,789 0

in € 000


Remaining term

< 1 year

1 to 5 years

> 5 years



TOTAL 101,354 30,202 71,152 0

Bank sureties and insurance guarantees were secured with bank deposits amounting to € 173 thousand. As at the balance sheet date, the assets serving as collateral are posted in the consolidated balance sheet with the following carrying amounts:

As well as that, the shareholder loans in the amount of € 30,000 thousand are secured by the pledging of shares in PINO. These shares correspond to the following assets in the consolidated financial statements.


201531 December

2014


Land and buildings 11,832 9,524

Machinery and technical equipment 1,796 1,572


Trade accounts receivable 24,377 25,832

Other assets 1,340 2,101

Liquid assets 321 496


201531 December

2014

Intangible assets 97 124

Land and buildings 5,620 5,742

Machinery and technical equipment 699 803

Factory and office equipment 1,678 1,706

Financial investments 474 474


Trade accounts receivable 8,258 5,627

Other assets 369 310


16. Deferred grants and subsidies from public authorities

Deferred grants and subsidies from public authorities in the amount of € 653 thousand (previous year: € 679 thou-sand) comprise investment grants for a subsidiary in the new German states. In the financial year, € 26 thousand (previous year: € 26 thousand) were reversed in other operating income.

17. Trade accounts payable and other financial liabilities

in € 000


Remaining term

< 1 year1 to 5 years

> 5 years

Trade accounts payable 100,166 75,155 25,011 0

Other financial liabilities 23,944 23,692 252 0

thereof customer discounts 10,218 10,218 0 0

thereof unpaid invoices 7,605 7,605 0 0

thereof customer accounts with credit balances 2,463 2,463 0 0

TOTAL 124,160 98,897 25,263 0

in € 000


Remaining term

< 1 year1 to 5 years

> 5 years

Trade accounts payable 97,764 78,261 19,503 0

Other financial liabilities 24,689 24,684 5 0

thereof customer discounts 12,794 12,794 0 0

thereof unpaid invoices 4,205 4,205 0 0

thereof customer accounts with credit balances 2,707 2,707 0 0

TOTAL 122,453 102.945 19,508 0

18. Remaining other liabilities

in € 000


Remaining term

< 1 year

1 to 5 years

> 5 years

Personnel 8,500 8,500 0 0

Miscellaneous 2,820 2,820 0 0

Other taxes 4,201 4,201 0 0

Social security 1,500 1,500 0 0

TOTAL 17,021 17,021 0 0

in € 000


Remaining term

< 1 year

1 to 5 years

> 5 years

Personnel 7,712 7,712 0 0

Miscellaneous 1,552 1,552 0 0

Other taxes 5,062 5,062 0 0

Social security 265 265 0 0

TOTAL 14,591 14,591 0 0


E. NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT

General information

In compliance with IAS 7 (Cash Flow Statements), the consolidated cash flow statement shows the change in cash and cash equivalents in the Group due to payment flows from operating activities, investment activities and financing activities, as well as through the change in ex-change rates during the year under review.

The net cash flow for operating activities shows a cash outflow of € 28,524 thousand in the year under review (previous year: cash inflow of € 15,156 thousand). This reduction was chiefly the result of changes in working capital. This was attributable firstly to an increase in trade accounts receivable, most notably in project business, but was also due to higher sales in the month of Decem-ber compared with the previous year as well as an in-crease in other assets. Secondly, to an increase in trade accounts payable, chiefly due to an extension in payment targets, albeit to a far smaller extent than in the previous year. Investment activities resulted in a cash inflow of € 21,521 thousand in the year under review, as compared to a cash outflow of € 52,746 thousand in the previous year. This sharp change is mainly due to the outpayments for the purchase of AFP Küchen AG in the previous year and the inpayments received for the shares as part of the sale of Impuls in the 2015 financial year and for sales of real estate, buildings and machinery. The decline of € 26,820 thousand in net cash and cash equivalents received from financing activities predominantly resulted from the borrowings for financial liabilities, which are low-er than in the previous year. In the previous year, the compulsory convertible bond with a nominal volume of

€ 14 million was included, as was the bank finance for the purchase of AFP. In the 2015 financial year, this was offset by a capital increase for cash with a cash inflow in the amount of € 5,775 thousand. The composition of the cash and cash equivalents as at the particular financial year end can be seen in D. 9.

F. NOTES ON SEGMENT REPORTING

The Board of Management controls ALNO AG in accord-ance with a matrix organisation, firstly through sales channels and secondly according to the legal enti-ties / brands. From 2014 onwards, internal management reporting has focussed on control according to sales channels, because with the takeover of AFP, a new End customer segment was added, including the expansion of ALNO Switzerland with its own shops. Production of PIATTI kitchens was moved to Pfullendorf. Furthermore, there are now exclusive customer projects with own brands, delivering not insignificant sales revenues. Consequently, it is no longer the case that only one brand is being manufactured in one plant. As a result of this, Sales was organised according to responsibilities, sales channels and associations.


Definition of the business segments

The following three business segments can be identified, which are subject to mandatory reporting:

Retail Large outlet (LGO) Kitchen specialists (KSP) Self-service / RTA (Self / RTA) Trade export

Project business Projects in Germany Projects outside Germany

End customer

Furthermore, there is an “Other” segment which includes all business transactions that cannot be directly allo-cated to the other segments. The sales revenue in the “Other” segment reports the sales revenue from the service / semi-finished business. The EBITDA in the “Other” segment chiefly includes the effects from the sale of Impuls in the 2015 financial year and the costs of the reorganisation. In 2014, the effects from the provisional purchase price allocation as part of the purchase of AFP and the costs of the reorganisation were included above all. This segment also includes the results by ALNO Logistik & Service (previous year: logismo).

The aforementioned business segments each have seg-ment managers responsible for the individual customer groups, who are responsible for reporting to the Board of Management in their areas.

Definition of the business segments subject to mandatory reporting

With the exception of the end-customer business, all of the aforementioned business segments are subject to mandatory reporting because they meet the criteria of IFRS 8, and exceed the quantity thresholds (sales revenue 10% rule).

From the perspective of the Board of Management, the End customer business segment, which does not exceed the quantity thresholds, is nevertheless regarded as sub-ject to mandatory reporting and is stated separately, because this information is useful for the audience of the financial statements.

Further mandatory information

IFRS 8.20 ff. regulates the information that must be pro-vided in the notes for each business segment subject to mandatory reporting.

The required information is described in the notes, as in previous years.

With regard to the information required, the explanations of the sales revenues and EBITDA are stated.

The required information does not have to be given re-garding the assets and liabilities, because neither assets nor liabilities play a role in internal reporting according to sales channels, or else these figures are not calculated (IFRS 8.23).

The information according to IFRS 8.21c in conjunction with IFRS 8.28 is also provided as before.


The segment data is presented below according to corporate divisions:

2015According to corporate divisions in € 000 Retail

Project business

End customer Others

Consoli-dation Total

Sales revenue

Foreign sales 325,782 165,256 30,034 433 0 521,505

Domestic sales 17,705 19,174 3,548 0 −40,427 0

Total sales 343,487 184,430 33,582 433 −40,427 521,505

Earnings

Segment EBITDA 5,722 7,728 3,330 23,209 −25,218 14,771

Reconciliation to profit / loss before income taxes:

Depreciation on intangible assets and property, plant and equipment −26,232

Financial result −12,972

Result before income taxes −24,433

2014According to corporate divisions in € 000 Retail

Project business

End customer Others

Consoli-dation Total

Sales revenue

Foreign sales 372,462 141,506 28,014 3,792 0 545,774

Domestic sales 20,425 10,201 1,491 0 −32,117 0

Total sales 392,887 151,707 29,505 3,792 −32,117 545,774

Earnings

Segment EBITDA −6,576 −6,930 474 62,308 −9,319 39,957

Reconciliation to profit / loss before income taxes:

Depreciation on intangible assets and property, plant and equipment −33,710

Financial result −12,555

Result before income taxes −6,308


Internal sales within the ALNO Group have been elimi-nated in the consolidated sales revenue.

The consolidation entries posted in the line “Segment EBITDA” are comprised as follows:

The other consolidation entries in 2015 mainly concern the elimination of the income from the intra-Group sale of the ALNO brand. In 2014, the other consolidation en-tries concerned the elimination of the interim results from the at equity valuation and in the inventories.

Regional sales are determined according to the place of delivery. There is no external customer in the ALNO Group with whom 10% or more of the total sales revenue is generated.

in € 000 2015 2014

Capital consolidation 31,605 −6,855

Debt consolidation −120 −2,620

Other consolidation entries −56,703 156

TOTAL −25,218 −9,319

Total sales according to regionsin € 000 2015 2014

Germany 228,956 263,385

Rest of Europe 277,600 268,979

Other foreign countries 14,949 13,410

TOTAL 521,505 545,774

Intangible assets, property, plant and equipment and investments measured at equity in € 000 2015 2014

Germany 72,606 87,544

Rest of Europe 74,309 78,058

Other foreign countries 442 436

TOTAL 147,358 166,038

G. MANAGEMENT OF FINANCIAL RISKS

1. Risk management principles

The basic principles of financial policy are defined annu-ally by the Board of Management and monitored by the Supervisory Board. Group Treasury is responsible for implementing the financial policy, as well as for the on-going risk management. Certain transactions require prior approval by the Board of Management, which is also regularly informed of the scope and magnitude of the current risk appraisal. Effective management of the market risks is one of the main Treasury responsibilities. Simulations using various worst case and market sce-narios are performed to assess the impacts of different conditions in the marketplace.

The Group is exposed to financial risks from financial assets and liabilities, as well as from planned transac-tions. Financial assets, such as trade accounts receiv able and liquid assets, are the direct result of operating activ-ities. Financial assets also include securities which serve as hedges for claims from pre-retirement part-time work-ing arrangements. The financial liabilities primarily com-prise bank loans, other financial liabilities and loans on current account, as well as trade accounts payable. The main purpose of financial liabilities is to finance the Group’s business operations.

The main risks arising for the Group from the financial assets and liabilities comprise interest rate risks, liquidity risks, currency risks and risk of default.

Due to the Group’s low-risk investment strategy, the risk of changes in the fair value of securities (price risk) is not a material risk from a Group vantage.


2. Currency risks

The currency risk refers to the risk of changes in the fair value or future cash flows of monetary items on account of fluctuations in exchange rates.

Currency risks basically arise from investments, financing activities and operating activities which are undertaken in a currency other than the company’s functional cur-rency. However, currency risks without impact on the Group’s cash flows, e.g. due to translating foreign corporate entities’ assets and liabilities into the Group currency, are never considered in further detail by Group Treasury.

There was no material risk in the investment sector as at the balance sheet date.

Currency risks in the financing sector mainly arise from foreign currency loans which are extended to Group companies for financing purposes as well as from trade payables within the Group.

Internal Group deliveries to the foreign sales companies in the UK, Switzerland, the USA and Sweden take place on the basis of double invoicing. This results in currency risks for the Group.

The subsidiary in the UK concluded several forward exchange transactions for currency hedging in 2015, each involving the purchase of € 250 thousand or € 500 thousand (totalling € 4,800 thousand) with terms until 29 January 2016 and 30 September 2016. The pos-itive market value at the balance sheet date amounts to € 149 thousand in total. In the previous year, the negative market value for this totalled € 31 thousand. There are no derivative financial instruments beyond that.

The following table shows the effect of changes in the fair value of monetary foreign currency items on Group profit / loss before income taxes. There are no effects on equity outside profit and loss.

3. Interest rate risks

The interest rate risk refers to the risk of changes in the fair value or future cash flows of financial assets and lia-bilities on account of changes in current interest rates.

The Group is primarily exposed to interest rate risks in the eurozone. To minimise the effect of fluctuations in interest rates in these regions, the interest rate risk for net financial liabilities made out in euros was managed by ALNO AG. Financial liabilities in foreign currencies only exist to a subordinate extent. There are no financial derivatives as at the balance sheet date.

Financial liabilities and the variable-interest factoring volume have been taken into account in the following analysis of sensitivity to interest rate movements. Only financial liabilities with variable interest rates have been included in the analysis. The analysis is also based on the assumption that the principal amounts and the ratio of fixed to variable interest rates remain unchanged. Assets with a floating interest rate are of subsidiary im-portance and are not included in this analysis.

2015Development of

exchange rate

Effect on result in € 000

Income (+) / expense (−)

GBP +10.0% −10.0% +829 −829

CHF +10.0% −10.0% +1,435 −1,435

USD +10.0% −10.0% +292 −292

2014Development of

exchange rate

Effect on result in € 000

Income (+) / expense (−)

GBP +10.0% −10.0% +456 −456

CHF +10.0% −10.0% +1,039 −1,039

USD +10.0% −10.0% +238 −238

AED +10.0% −10.0% +339 −339


If the average interest rate were to be increased by 100 (previous year: 100) basis points, which is currently un-likely, the result before taxes on income would decrease by € 469 thousand (previous year: € 499 thousand). A reduction of 100 (previous year: 100) basis points would lead to an increase by € 469 thousand (previous year: € 499 thousand) in profit / loss before income taxes. Mi-nor changes in the interest rate lead to insignificant ef-fects.

4. Risk of default

The risk of default refers to the risk that a contractual partner fails to discharge its payment obligations in con-junction with financial assets. The maximum risk of de-fault corresponds to the carrying amounts of the assets plus financial guarantees and / or warranty obligations.

Accounts receivable in operating business are continu-ously monitored at segment level, i.e. decentralised. In conjunction with Group receivables management, mini-mum requirements as regards creditworthiness and maximum exposure limits are defined for all business partners of the ALNO Group. These are based on a sys-tem of defined limits for which compliance is constantly monitored. In addition, the ALNO Group safeguards its trade receivables through trade credit insurance which, if an account receivable is not paid, will indemnify the loss incurred in the contractually agreed amount. Spe-cific valuation allowances are used to take account of the risk of default. Trade receivables are secured through trade credit insurers and the del credere liability of the central regulatory offices in the overall amount of 90% (previous year: 90%). The ALNO Group companies de-cide in each individual case whether or not to make use of the credit insurance.

In Germany, the kitchens produced by the ALNO Group are mainly sold through furniture stores and specialised kitchen retailers, as well as self-service and RTA stores, most of which are members of purchasing associations. Due to these market structures, the ALNO Group is de-pendent on a limited number of customers on the sales side. However, the receivables are from the individual affiliates or furniture stores in each case, as a result of which there is ultimately no risk concentration. The risk of default by individual key accounts, however, is met

through trade credit insurance or del credere liability by central regulatory offices.

The risk of default for unimpaired financial assets and the development of specific valuation allowances are summarised in section D.6. “Trade accounts receivable”.

5. Liquidity risks

The liquidity risk refers to the risk that the Group is un able to meet its contractual obligations in settling its financial liabilities.

ALNO AG acts as financial coordinator for all Group com-panies in order to ensure that the financing required for the operational business is always adequate and as cost-efficient as possible. The information required for this purpose is updated on a monthly basis through roll-over financial planning with a planning horizon of one year and subjected to variance analyses.

This financial planning is supplemented by daily cash flow development planning for the German companies which is constantly reconciled with the actual payment flows. The foreign subsidiaries are updated on a weekly basis. Available liquidity reserves are monitored constantly by ALNO AG.

Accounts receivable by ALNO AG as well as pino Küchen GmbH, Wellmann GmbH & Co. KG, AFP Küchen GmbH and ALNO U.K. Ltd. are assigned within the scope of factoring agreements in order to extend the liquidity mar-gin needed by the ALNO Group. Impuls Küchen GmbH had also used factoring until the date of its deconsoli-dation on 30 June 2015. These five (previous year: six) companies can make variable use of total factoring com-mitments in the amount of € 44,261 thousand (previous year: € 49,993 thousand). Of this total, € 22,939 thou-sand (previous year: € 23,876 thousand) was used on average over the year.

The table below presents the contractually agreed interest payments and principal payments of the financial liabilities. All liabilities which were included in the portfolio on the closing date and for which payments had already been contractually agreed have been included. Budgeted fig-ures for new liabilities in the future are not included in the


calculation. Amounts in foreign currency have been trans-lated at the rate prevailing on the reporting date. Variable interest payments have been calculated on the basis of the last interest rates fixed prior to the balance sheet date. Financial liabilities which can be repaid at any time are always assigned to the earliest possible time frame.

With regard to the measures taken to assure the com-pany’s continuation as a going concern and to assure its liquidity, we refer to the information provided in sections B.1. “Basis for preparation of the financial statements” and N. “Events after the balance sheet date”.


31 December 2015

Due in

2016 2017 – 2020 2021 or later

Other financial liabilities



Trade accounts payable and other financial liabilities 124,160 98,897 25,263 0

Shareholder loans 43,125 3,441 42,718 0

Warranty obligations 0 184 0 0

Derivatives 149 149 0 0


31 December 2014

Due in

2015 2016 – 2019 2020 or later

Other financial liabilities



Trade accounts payable and other financial liabilities 122,453 102,945 19,508 0

Shareholder loans 30,000 11,788 21,950 0

Warranty obligations 0 308 0 0

Derivatives −31 −31 0 0


6. Other information on financial assets and liabilities

The following table presents the carrying amounts and fair values of all financial assets and liabilities recognised in the Group. Current financial assets and liabilities valued at amortised costs are not presented because in that case the carrying value and fair value correspond to one

in € 000

31 December 2015 31 December 2014

Carrying amount Fair value

Carrying amount Fair value

Financial assets

Trade accounts receivable LaR 978 978 725 725

Financial accounts receivable LaR 12,661 12,661 3,544 3,544

Securities AfS 258 258 885 885

Investments in associated companies AfS 123 * 114 *

Financial liabilities

Shareholder loans FLaC 43,125 43,125 20,000 20,000

Other financial liabilities FLaC 77,789 68,173 71,152 48,192

Derivatives HfT 149 149 −31 −31

* Fair value cannot be determined reliably.

another. The fair values of the bond liabilities included in the other financial liabilities are calculated at their market value on the closing date. The financial assets and liabil-ities are divided into various categories according to IAS 39. This are loans and receivables (LaR), available- for-sale financial assets (AfS), financial liabilities measured at cost (FLaC) as well as assets or liabilities held for trad-ing (HfT). The HfT items are derivatives of the subsidiary in the UK.


The following table presents the carrying amount of the financial assets and liabilities for each evaluation cate-gory according to IAS 39:

The posted securities are recognised at fair value in their full amount.

Shares held in associated companies are capitalised at the amortised cost of acquisition, as there is no active market for these. Also, the fair value cannot be reliably determined in any other way.

The carrying amounts of current financial assets and lia-bilities correspond to their fair value on account of the short term to maturity.

The following hierarchy is used to measure and recog-nise the fair value of financial instruments:

Stage 1: Fair values determined with the aid of prices quoted in active markets.

Stage 2: Fair values determined with the aid of meas-urement policies for which the input factors of signifi-cance for the fair value are based on observable market data.

in € 000

31 December 2015

Carrying amount

31 December 2014

Carrying amount

Loans and receivables (LaR) 79,266 65,244

Available for sale (AfS)

measured at fair value 258 885

measured at amortised cost of acquisition 123 114

Financial liabilities measured at cost (FLaC) 263,253 253,807

Held for trading (HfT) 149 −31

Stage 3: Fair values determined with the aid of meas-urement policies for which the input factors of signifi-cance for the fair value are not based on observable market data.

At the end of each reporting period, an investigation is performed into whether reallocations need to be per-formed between the hierarchical levels. There were no reallocations in the reporting year.

The current values of the non-current financial assets and liabilities have been calculated by discounting their future payment flows. This is based on current discount rates under standard market conditions with the same due date and creditworthiness requirement (hierarchical level 2). The current values, with the exception of the issued bond, correspond to the carrying amounts be-cause the interest rate is in accordance with the market.

The securities valued in the ALNO Group at fair value amounting to € 258 thousand (previous year: € 885 thou-sand) are on hierarchical level 1. Securities were sold in 2015, which is why this item has decreased.

The current value of the exchange-quoted bond issued in 2013 reported under other financial liabilities amount-ing to € 36,225 thousand (previous year € 24,333 thou-sand) is calculated using the stock exchange price as at 30 December 2015 in the amount of 81% (hierarchical level 1). The current value of the bond issued in 2014 amounting to € 11,200 thousand (previous year € 9,138 thousand) is calculated using the stock exchange price as at 30 December 2015 in the amount of 80% (hierarchical level 1). The remaining other financial liabil-ities are bank liabilities with an interest rate in conformity with the market (hierarchical level 2). Assets or liabilities held for trading (HfT) are allocated to hierarchical level 1.


This resulted in the following net gains and losses for the financial assets and liabilities, classified according to categories:

Impairments of the “Loans and receivables” relates to the allocation to specific valuation allowance for trade accounts receivable. The other net gains and losses in-clude income from the receipt of derecognised accounts receivable and from the reversal of specific valuation allowances, expenses from derecognised accounts re-ceivable, and gains and losses from currency translation.

The other net gains and losses recognised in the cate-gory “Available for sale – measured at fair value” include income from investments in securities and the unrealised changes in value recognised in equity.

2015in € 000 Interest

Interest according to the effective

interest method ImpairmentOther net

gains / losses

Net gains / losses not

affecting net income Total

LaR 333 0 −912 300 0 −279

AfS 4 0 0 0 −8 −4

FLaC −6,681 −5,669 0 462 0 −11,888

HfT 0 0 0 149 0 149

2014in € 000 Interest

Interest according to the effective

interest method ImpairmentOther net

gains / losses

Net gains / losses not

affecting net income Total

LaR 2,648 0 −546 −366 0 1,736

AfS 7 0 0 0 1 8

FLaC −6,096 −5,385 0 425 0 −11,056

HfT 0 0 0 −31 0 −31

Revenue from derecognised liabilities is reported under other net gains and losses of “financial liabilities meas-ured at cost”.

The net gains and losses reported in the “Held for trad-ing” category result from the change in market values of derivatives.


H. CONTINGENCIES AND OTHER FINANCIAL OBLIGATIONS

As at 31 December 2015, contingent liabilities under non-recognised warranty agreements for building companies in the project business as well as bills for security exist in the amount of € 184 thousand (previous year: € 308 thousand). There are also guarantee bonds issued by the ALNO Group to construction guarantee

Rental and leasing agreements with third parties pri marily concern leased vehicles and factory and office equip-ment. Some of these agreements have extension and purchase options. The other contractual agreements with third parties concern maintenance, service and power supply contracts.

2015in € 000 Due in 2016 Due in 2017 – 2020

Due in 2021 and later Total

Rental and leasing agreements with third parties 7,504 20,418 8,501 36,423

Other contracts with third parties 10,291 23,167 8,628 42,086

Ongoing investment projects 1,656 205 94 1,956

Supply contracts 3,927 3,036 653 7,616

TOTAL 23,379 46,826 17,876 88,081

2014in € 000 Due in 2015 Due in 2016 – 2019

Due in 2020 and later Total

Rental and leasing agreements with third parties 7,933 18,324 7,787 34,044

Other contracts with third parties 8,213 23,887 8,160 40,259

Ongoing investment projects 7,518 2,600 0 10,118

Supply contracts 5,628 8,137 653 14,418

TOTAL 29,291 52,948 16,600 98,839

insurance companies in the amount of € 6,003 thousand and guarantees in the amount of € 10,897 thousand to Swiss banks.

The other financial commitments are as follows:

Ongoing investment projects in the amount of € 1,656 thou-sand (previous year: € 7,518 thousand) mainly relate to technical equipment and machines.


I. RELATED PERSONS AND COMPANIES

Related persons or companies are defined as persons or business entities which can be controlled by the reporting company, insofar as they are not already in-cluded in the consolidated financial statements as

consolidated companies, or which can directly or indi-rectly exercise control over the reporting company.

In detail, business relations are as follows:

Persons concerned Shareholders > 3% Joint ventures Other related companies

Business relationships2015

in € 0002014

in € 0002015

in € 0002014

in € 0002015

in € 0002014

in € 000

Sales revenue 504 0 2,378 4,847 0 0

Purchased goods and services 40,848 51,115 100 0 0 0

Interest expense 4,664 3,522 0 0 2 547

Interest received 30 24 199 198 0 0

Other expense 246 0 0 0 0 497

Other income 0 40 1,845 0 0 0

Financial accounts receivable 1,000 1,000 3,100 2,895 0 0

Trade accounts receivable 32 0 2,448 1,596 0 0

Financial liabilities 43,125 34,885 0 0 1,572 8.125

Trade accounts payable and other liabilities 52,467 48,007 53 0 0 307

Interest rate

Up to 31 July: 3.0% or 6.5%

p.a.;

From 1 August: 4.5% or 6.5%

p.a.3.0% or 6.5%

p.a.

Up to 30 September:

6.5% or 7.5% p.a.;

From 1 October: 6.5% p.a.

6.5% or 7.5% p.a. 3.5% p.a. 6.5% p.a.


The table above does not provide any information about any shares which may have been purchased and held by the aforementioned persons in the bonds issued in May 2013 and March 2014, which are freely traded on the market and have an interest rate of 8.5% p.a and 8.0% p.a. respectively. This is also true of the bond is-sued in November 2015, which is not freely traded on the market and has an interest rate of 6.0% p.a.

Shareholders with a share of the voting rights of more than 3% are directly Whirlpool Germany GmbH, Stuttgart, Nature Home Holding Company Limited, Hong Kong, China, Nordic Kitchen Holding AG, Zug, Switzerland, SE Swiss Entrepreneur AG, Zug, Switzerland, and Paul Cap-ital PCTS Holdings LP, San Francisco, USA as well as indirectly Bauknecht Hausgeräte GmbH, Stuttgart, and Whirlpool Corporation, Wilmington, Delaware, USA. There are also the companies in which Max Müller and family hold shares; these chiefly include Comco Holding AG, Nidau, Switzerland, Comco Finanz AG, Nidau, Switzer-land and Smaragd Holding AG, Nidau, Switzerland, which are assigned to the major shareholders.

The joint ventures are ALNO China Holding Limited, Hong Kong, China, tielsa GmbH, Pfullendorf and OOO Pervaya mebelnaya fabrika – ALNO, St. Petersburg, Russia.

The other related companies with which business rela-tions exist comprise the pension fund foundation of AFP Küchen AG, Arbon, Switzerland.

The figure reported for purchased goods and services and for trade payables and other liabilities essentially relates to the contract for delivery between ALNO AG and Bauknecht Hausgeräte GmbH, Stuttgart (subse-quently Whirlpool). This contract governs the supply of electrical appliances from Bauknecht / Whirlpool to the ALNO Group, which runs until 30 June 2017 and was extended to 31 January 2021 on 15 March 2016.

Under the contract, the ALNO Group shall obtain the majority of its requirement for electrical appliances (with the exception of some articles such as microwave ovens and built-in refrigerators) from Whirlpool. Whirlpool is liable to ALNO within the scope of the manufacturer’s warranty. As far as possible, customer service is handled via Whirlpool. The net invoice prices are negotiated annually on the basis of overall market and economic developments.

For 2015, ALNO received a restructuring bonus of € 800 thousand (previous year: € 400 thousand), which is offset against outstanding liabilities. The bonus is granted on an annual basis, and its actual amount de-pends on the total volume of overdue receivables at the end of the month.

The accounts payable towards Whirlpool must be settled within 90 days of the invoice date. Since July 2015, over-due accounts payable have been subject to interest at 4.5% (previously: 6.5%) p.a.

ALNO grants Whirlpool a first-class right of lien in the form of shares in pino Küchen GmbH in order to secure all rights and claims of Whirlpool against the ALNO Group. The contract with Whirlpool also contains a simple reservation of title by Whirlpool.

The contract with Whirlpool was concluded subject to usual market conditions.

In the financial year, the postponement of trade paya-bles resulted in interest amounting to € 2,245 thousand (previous year: € 1,572 thousand) due to Whirlpool.

Whirlpool granted the ALNO Group a loan amounting to € 30,000 thousand in 2013 in order to cover the latter’s financing requirement, in the form of restructuring current trade payables. An additional loan of € 5,000 thousand was also granted in January 2015. € 33,500 thousand of these loans had a term up to 31 July 2017 on the balance sheet date, while € 1,500 thousand are due on 30 Sep-tember 2016. In 2015, interest at the rate of 4.5% from July 2015 (previously: 6.5%) p.a. in the total amount of € 1,698 thousand (previous year: € 1,950 thousand) was due for the loans.


Comco Holding AG, Nidau, Switzerland, had made sev-eral loans available to ALNO AG to cover the financing requirement. As at 31 January 2013, the book value of these loans totalled € 8,525 thousand. In 2014, a partial repayment was made in the amount of € 400 thousand; these loans are unchanged since then, as a result of which the loan book value at the end of the 2015 financial year was € 8,125 thousand. The loans have a term until 31 July 2017 as at the balance sheet date. In 2015, in-terest at the rate of 6.5% p.a. in the total amount of € 748 thousand (previous year: € 547 thousand) was due for the aforementioned loans.

Telecommunications charges in the amount of € 1 thou-sand were charged on by Comco Holding AG, Nidau, Switzerland. Comco Finanz AG, Nidau, Switzerland, invoiced ALNO (Schweiz) AG € 10 thousand for per-sonnel services. In the previous year, motor vehicle expenses and telecommunications charges in the amount of € 31 thousand as well as travel expenses in the amount of € 10 thousand were charged on by Com-co Holding AG, Nidau, Switzerland. Comco Finanz AG, Nidau, Switzerland, received remunerations of € 57 thou-sand for rents (previous year: € 43 thousand). Re-muneration of the Administrative Council of ALNO (Swit-zerland) AG, Nidau, Switzerland, is accounted for by Comco Holding AG, Nidau, Switzerland, as a corporate borrowing in the amount of € 197 thousand (previous year: € 176 thousand).

In the previous year, Smaragd Holding AG, Nidau, Switzerland, received remunerations of € 237 thousand for consulting services provided in the last quarter of 2014 but received nothing in the current financial year.

ALNO AG sold intellectual property and brand rights in the amount of € 1,800 thousand to tielsa GmbH in 2012. The receivable for the purchase price was converted into a current purchase price loan of the same amount. Fur-thermore, an additional € 200 thousand was granted to tielsa GmbH as a short-term loan in order to cover its financing requirement. Both loans were applied to tielsa GmbH as a non-cash capital contribution in 2014. In 2014, ALNO AG provided tielsa GmbH with a loan in the total amount of € 195 thousand to cover its ongoing

financing requirement. This was also applied to tielsa GmbH as a non-cash capital contribution in 2015. In 2015, several loans totalling € 311 thousand were pro-vided and € 89 thousand from trade accounts receivable converted into loan receivables. In total, the interest in-come from all the above-mentioned loans came to € 23 thousand in total in the financial year (previous year: € 66 thousand). The loan in the amount of € 400 thou-sand is due on 30 June 2016 and has had an interest rate of 6.5% since October 2015 (previously: 7.5%) p.a.

In addition, ALNO AG granted ALNO China Holding Limited a loan in 2013 amounting to € 1,350 thousand to cover its financing requirement as well as, in 2014, a further loan amounting to € 1,350 thousand. Interest derived from this during the financial year amounted to € 176 thousand (previous year: € 132 thousand). The loans are due in December 2016 and have an interest rate of 6.5% p.a.

The pension fund foundation of AFP Küchen AG, Arbon, Switzerland, granted AFP Küchen AG a loan in the amount of € 1,572 thousand. This loan has a term until 31 December 2018, with an interest rate of 3.5% per annum.

All the above expenses and services were charged at customary market rates.

Business transactions and the emoluments of corporate officers are listed in section J.


J. SUPERVISORY BOARD AND BOARD OF MANAGEMENT

The Supervisory Board has the following members:

Shareholder representatives: Hanns Robert Ernst-Wilhelm Rech, Zug, Switzerland (member from 21 January 2015, chairman from 2 June 2015) Independent company consultant HRR Consult-ing AG, Zug

Henning Giesecke, Zell (chairman up to 2 June 2015) Consultant

Anton Walther, Sulzbach / Taunus Independent lawyer, chartered accountant, tax consultant

Norbert J. Orth, Monaco, Monaco Investor

Hubertus Krossa, Wiesbaden Freelance company consultant

Werner Rellstab, Uetikon Waldegg, Switzerland President of various administrative boards

Employee representatives:: Waltraud Klaiber, Pfullendorf (vice-chairman from 2 June 2015) Freed for full-time works council activity at ALNO AG, Pfullendorf

Christian Schwengel, Kirchlengern (from 2 June 2015) Freed for full-time works council activity at Gustav Wellmann GmbH & Co. KG, Enger

Dagmar Heine, Dessau-Roßlau (from 1 October 2015) Freed for full-time works council activity at pino Küchen GmbH, Coswig

Rudolf Wisser, Meßkirch (vice-chairman, up to 2 June 2015) Work preparation employee at ALNO AG, Pfullendorf

Jörg Kespohl, Löhne (up to 2 June 2015) Commercial clerk at Gustav Wellmann GmbH & Co. KG, Enger

Gerhard Meyer, Brilon (up to 30 September 2015) Member of the works council at Impuls Küchen GmbH, Brilon

Further mandates held by members of the Supervisory Board in Supervisory Boards and other controlling bodies within the meaning of Section 125 subsection 1, sentence 5 of the Stock Corporation Act (AktG):

Hanns Robert Ernst-Wilhelm Rech, Zug, Switzerland Member of the Supervisory Board of Pelican Rouge Group B.V., Dordrecht, Netherlands

Henning Giesecke, Zell Vice-chairman of the Supervisory Board of Endurance Capital AG, Munich

Member of the Administrative Council of Erste Abwicklungsanstalt AöR, Düsseldorf

Vice-chairman of the Supervisory Board of Hypo Group Alpe Adria AG, Klagenfurt, Austria (from 17 July 2015)

Vice-chairman of the Supervisory Board of Hypo-Group-Bank d.d., Ljubljana, Slovenia (from 17 September 2015)

Member of the Supervisory Board of Hypo-Alpe-Adria-Bank AD Podgorica, Podgorica, Montenegro (from 21 November 2015)

Member of the Supervisory Board of Airbus Group Bank GmbH, Munich (from 14 October 2015)

Hubertus Krossa, Wiesbaden Chairman of the Supervisory Board of Balfour Beatty Rail GmbH, Munich

Chairman of the Supervisory Board of Eckelmann AG, Wiesbaden

Vice-chairman of the Supervisory Board of United Power Technology AG, Eschborn

Member of the Supervisory Board of SFC Energy AG, Brunnthal, Munich

Werner Rellstab, Uetikon Waldegg, Switzerland Member of the Advisory Council of Innovative Management Partner Unternehmensberatungs- GmbH, Innsbruck, Austria

President of the Administrative Council of Fraumünster Holding AG, Zurich, Switzerland

Member of the Administrative Council of Swiss Immoconsult AG, Zurich, Switzerland

President of the Administrative Council of ALNO (Schweiz) AG, Nidau, Switzerland

President of the Administrative Council of AFP Küchen AG, Arbon, Switzerland


Norbert J. Orth, Monaco, Monaco Member of the Administrative Council of AFP Küchen AG, Arbon / Switzerland (from 7 October 2015)

Member of the Administrative Council of ALNO (Schweiz) AG, Nidau, Switzerland (from 21 August 2015)

For their activities, the members of the Supervisory Board received total remuneration in the amount of € 480 thou-sand (previous year: € 453 thousand).

The employees’ representatives received remuneration in the total amount of € 166 thousand (previous year: € 179 thousand).

Members of the Supervisory Board did not receive any fees for consulting services. HBconbet GmbH, Zell, of which Mr Giesecke is a shareholder and was managing director last year, has concluded a commission agree-ment with ALNO AG regarding the arrangement of trans-actions. In the financial year 2015, the remuneration amounted to € 22 thousand (previous year: € 35 thou-sand). Mr Orth, Mr Krossa and Mr Rech rendered ser-vices for company consulting in the amount of € 27 thou-sand in total (previous year: € 12 thousand). Mr Rellstab received remuneration for his activity as President of the Administrative Council of ALNO (Schweiz) AG and AFP Küchen AG in the amount of € 181 thousand (previous year: € 88 thousand) and, furthermore, € 0 thousand (previous year: € 49 thousand) for consulting services provided to ALNO (Schweiz) AG.

As at 31 December 2015 the members of the Super-visory Board held a total of 292,300 (previous year: 342,000) no-par-value shares.

Members of the Board of Management

Max Müller, Magglingen, Switzerland (CEO) Ipek Demirtas, Überlingen (CFO) Ralph Bestgen, Überlingen (CSO) (up to 30 June 2015) Manfred Scholz (COO), Rosenheim, (up to 28 February 2015)

Further mandates held by members of the Board of Management in Supervisory Boards and other controlling bodies within the meaning of Section 125 subsection 1, sentence 5 of the Stock Corporation Act (AktG):

Max Müller, Magglingen, Switzerland Administrative Council of ALNO (Schweiz) AG, Nidau, Switzerland

Administrative Council of AFP Küchen AG, Arbon, Switzerland

Board of Directors of ALNO UK Ltd., Leeds, UK Board of Directors of ALNO Middle East FZCO, Dubai, UAE

Board of Directors of ALNO China Holding Ltd., Hong Kong, People’s Republic of China

Administrative Council of Comco Holding AG, Nidau, Switzerland

Administrative Council of Comco Finanz AG, Nidau, Switzerland

Director of Comco Trading Ltd., Hong Kong, People’s Republic of China

President of the Administrative Council of Starlet Investment AG, Nidau, Switzerland

Administrative Council of Max Müller + Partner AG, Nidau, Switzerland

Director of East West Finance Ltd., Jersey, Channel Islands

President of the Administrative Council of Schaerer Mayfield Holding AG, Nidau, Switzerland

Member of the Administrative Council of Renishaw Mayfield AG, Nyon, Switzerland

President of the Administrative Council of Smaragd Holding AG, Nidau, Switzerland

Administrator of Helvetansa S.r.l., Bucharest, Romania (up to 1 January 2015)

Ipek Demirtas, Überlingen Verwaltungsrat der AFP Küchen AG, Arbon, Schweiz (ab 6. März 2015)

Verwaltungsrat der ALNO (Schweiz) AG, Nidau, Schweiz (ab 28. Mai 2015)

Board of Directors der ALNO UK Ltd, Leeds, Großbritannien (ab 1. Juli 2015)

Ralph Bestgen, Überlingen Administrative Council of AFP Küchen AG, Arbon, Switzerland (from 6 March 2015)

Administrative Council of ALNO (Schweiz) AG, Nidau, Switzerland (from 28 May 2015)

Board of Directors of ALNO UK Ltd., Leeds, UK (from 1 July 2015)

Manfred Scholz, Rosenheim Administrative Council of AFP Küchen AG, Arbon, Switzerland (up to 6 March 2015)

As at 31 December 2015, the Chief Executive Officer Max Müller and his family directly and indirectly held 5,030,000 shares in the company, corresponding to 6.65% of the share capital of ALNO AG. All other members of the Board of Management held fewer than 1% of the shares in ALNO AG both at the end of 2015 and at the end of the previous year 2014. In total, the members of the


Board of Management and their families held 5,280,000 shares on 31 December 2015.

Remuneration report

Responsibility, objective and structure of remuneration for the Board of Management

The Supervisory Board is responsible for defining the structure and amount of remuneration for the Board of Management of ALNO AG. The structure of the remuner-ation system for the Board of Management is also regu-larly discussed and reviewed by the Supervisory Board.

The purpose of the system of remuneration for the Board of Management is to reasonably compensate the mem-bers of the Board of Management in accordance with their activities and responsibilities while at the same time clearly and directly taking account of the Board mem-bers’ joint and personal performance as well as that of the company through a high level of variability.

To this end, the remuneration system includes both a fixed basic element and a variable risk-like element as in-centive for the medium and long term. In order to ensure that the Board members’ remuneration is both compet-itive and reasonable, this structure, the individual com-ponents and the complete remuneration are reviewed each year.

At ALNO AG, as an exchange-quoted company, the re-muneration structure is oriented towards sustainable development of the company (Section 87 subsection 1 sentence 2 and sentence 3 of the Stock Corporation Act (AktG)). As a result, the remuneration elements for the Board members have a multi-year assessment basis and, for the most part, are structured in such a way that the disbursement of the profit-sharing bonuses agreed in each case extends over three years, while disburse-ment in the two following years depends on other success targets.

The remuneration paid to the Board of Management in 2015 therefore comprised the following elements as outlined in detail below.

A fixed basic remuneration including non-cash emolu-ments is paid out in twelve monthly instalments and is based on each Board member’s area of responsibility.

A variable element based on the company’s medium and long-term development is always based on consolidated

revenues and operational Group EBITDA, as well as on individual agreements on targets. The variable element is paid out following the annual general meeting.

Amount of remuneration paid to the Board of Management in 2015

Total remuneration paid to the Board of Management for the 2015 financial year according to DRS 17The following figures for remuneration paid to the Board of Management represent the payments made to the Board of Management in accordance with Section 314 of the German Commercial Code (HGB) in conjunction with DRS 17 and include payments promised or made to the individual Board member by ALNO AG in conjunc-tion with his activity as at the balance sheet date. In contrast to the information provided below in the context of the German Corporate Governance Code (DCGK), these also take account of provisions and thus corre-spond to the actual expenditure reported in the financial year. Total emoluments for the Board of Management comprise the sum of all remuneration paid in cash and all non-cash benefits. The latter essentially comprise the provision of company cars.

€ 2,367 thousand (previous year: € 2,425 thousand) were expensed altogether in 2015. Of this total, the fixed, i.e. unrelated to performance, element accounted for € 940 thousand (previous year: € 1,327 thousand) and the performance-related variable element in the nature of a medium-term incentive payment accounted for € 1,069 thousand (previous year: € 1,043 thousand) as well as redundancy payments of € 358 thousand (previ-ous year: € 55 thousand).

Of the total expenses in 2015, Mr Müller received € 1,000 thousand (previous year: € 870 thousand), of which € 423 thousand (previous year: € 424 thousand) comprised fixed remuneration elements and € 577 thou-sand (previous year: € 446 thousand) comprised variable remuneration elements.

Ms Demirtas received total remuneration in 2015 in the amount of € 801 thousand (previous year: € 578 thou-sand), of which € 309 thousand (previous year: € 279 thousand) comprised fixed remuneration elements and € 492 thousand (previous year: € 299 thousand) comprised variable remuneration elements.

Mr Bestgen received € 322 thousand for the year 2015 (previous year: € 462 thousand) of which € 156 thousand (previous year: € 312 thousand) comprised fixed


remuneration components as well as € 166 thousand in redundancy payments. A variable remuneration element was not paid to Mr Bestgen in 2015 (previous year: € 150 thousand).

Mr Scholz received € 243 thousand for the year 2015 (previous year: € 460 thousand) of which € 51 thousand (previous year: € 312 thousand) comprised fixed re-muneration components as well as € 192 thousand in redundancy payments. A variable remuneration element was not paid to Mr Scholz in 2015 (previous year: € 148 thousand).

Board of Management Remuneration 2015 accord-ing to the German Corporate Governance CodeThe following statement of remuneration paid for the 2015 financial year takes account not only of the account-ing principles to be applied but also the recommenda-tions of the German Corporate Governance Code (DCGK). Thus, the model table recommended by the Code is used for presenting the statement of the value of allocations granted for the year under review. It also specifies the values that can be reached as a minimum and a maximum.

The following remuneration was paid to members of the Management Board for the 2015 financial year according to contract (personalised information):

Allocations granted (contractual entitlements) in € 000

Max Müller, CEO, Chairman of the Board of Management6 April 2011 / – Start date / leaving date

2014 2015 2015 Minimum 2015 Maximum

Fixed remuneration 420,000 420,000

Fringe benefits 3,676 3,614

Total 423,676 423,614

One-year variable remuneration 1) 800,000 800,000 0 1,600,000

Multi-year variable remuneration 66,667 133,333 0 133,333

Long-term profit-sharing bonus targets 0 0

2 years (2012 – 2013) 0 0

Transaction bonus 0 431,000 0 441,000

Total 866,667 1,364,333

Benefit expense 0 0

TOTAL REMUNERATION 1,290,343 1,787,947

1) to be paid over several years.


Ipek Demirtas, CFO16 October 2010 / – Start date / leaving date




Total 278,913 309,335

One-year variable remuneration 1) 150,000 160,000 0 320,000

Multi-year variable remuneration 66,667 133,333 0 133,333


3 years (2012 – 2014) 0 0

Transaction bonus 0 431,000 0 441,000

Total 216,667 724,333

Benefit expense 0 0

TOTAL REMUNERATION 495,580 1,033,668




Ralph Bestgen, CSO1 February 2013 / 30 June 2015 – Start date / leaving date




Total 312,470 156,282


Multi-year variable remuneration 66,667 0 0 0


3 years (2013 – 2015) 0 0

Total 240,417 87,500

Benefit expense 0 0

TOTAL REMUNERATION 552,887 243,782



Manfred Scholz, COO29 April 2013 / 28 February 2015 – Start date / leaving date




Total 311,864 50,777


Multi-year variable remuneration 66,667 0 0 0


3 years (2013 – 2015) 0 0

Total 236,667 29,167

Benefit expense 0 0




The following tables show the actual payments to in-dividual members of the Board of Management in the financial years 2014 and 2015:

Payments made in € 000

Max Müller, CEO, Chairman of the Board of Management6 April 2011 / – Start date / leaving date

2014 2015



Total 423,676 423,614

One-year variable remuneration 266,000 145,800

Multi-year variable remuneration 0 0


2 years (2012 – 2013) 0 0

Transaction bonus 0 300,000

Total 266,000 445,800

Benefit expense 0 0



Ipek Demirtas, CFO16 October 2010 / – Start date / leaving date

2014 2015



Total 278,913 309,335

One-year variable remuneration 40,000 60,762



3 years (2012 – 2014) 0 0

Transaction bonus 160,000 0

Total 200,000 60,762

Benefit expense 0 0




Ralph Bestgen, CSO1 February 2013 / 30 June 2015 – Start date / leaving date

2014 2015



Total 312,470 156,282

One-year variable remuneration 73,334 0



3 years (2013 – 2015) 0 0


Total 73,334 166,250

Benefit expense 0 0



Elmar Duffner, COO2 November 2011 / 31 May 2013 – Start date / leaving date

2014 2015

Fixed remuneration 0 0

Fringe benefits 0 0

Total 0 0

One-year variable remuneration 0 0


Long-term profit-sharing bonus targets 0

3 years (2013 – 2015) 0 0

Transaction bonus 55,417 0

Total 55,417 0

Benefit expense 0 0

TOTAL REMUNERATION 55,417 0


Substantial commitments to a member of the Board of Management following premature termination of his service

A termination payment was agreed for 2015 with the Board members Messrs Ralph Bestgen and Manfred Scholz in the event of premature termination of their ser-vice contracts. The service contract concluded with Mr Bestgen was terminated prematurely as per 30 June 2015 at Mr Bestgen’s request and a contractually agreed amount of € 166 thousand remitted in lieu of all the re-muneration payable had the contract remained in force until 31 January 2016.

The service contract concluded with Mr Scholz was terminated prematurely as per 28 February 2015 at Mr Scholz’s request and a contractually agreed amount of € 192 thousand remitted in lieu of all the remuneration payable had the contract remained in force until 30 April 2016.


Manfred Scholz, COO29 April 2013 / 28 February 2015 – Start date / leaving date

2014 2015



Total 311,864 50,777

One-year variable remuneration 54,137 0



3 years (2013 – 2015) 0 0


Total 54,137 192,113

Benefit expense 0 0


Lawsuit with Mr Jörg Deisel

On 6 November 2014, the Düsseldorf Higher Regional Court (HRC) rejected in full the claims by the former Chairman of the Board of Management, Jörg Deisel, against ALNO AG in both cases (reference: I-6 U 68 / 14 and I-6 U 69 / 14).

In its written verdict, the HRC took the opinion after a process lasting three and a half years that the plaintiff had not correctly and completely informed the Super-visory Board in September 2009 in relation to the com-pany concept 2013 at the time, and consequently he had destroyed the necessary relationship of trust between the Supervisory Board and the Board of Management. The violation of duty by the plaintiff is to be regarded as serious, according to the court, because it relates to fundamental rights of information and control that are due to the Supervisory Board. Furthermore, the case presented by the plaintiff against his extraordinary dis-missal was contradictory in part, the court felt. There was “a gross violation of duty undermining trust” which led to the situation that ALNO AG “could not have reasonably been expected to continue the contractual relationship with the plaintiff”. The extraordinary dismissal on 6 April 2011 was thus legal.


Previously ALNO AG had been ordered to pay a total of about € 2.4 million in salary and bonuses to the plaintiff as a result of several (provisional) judgments of the court of first instance by the Düsseldorf Higher Regional Court, the most recent being the order to pay about € 1.2 million on 9 January 2014. As a result of the verdicts by the HRC on 6 November 2014, ALNO AG was refunded these payments by the plaintiff in November 2014, plus interest.

The Düsseldorf HRC did not allow an appeal to the Fed-eral Court of Justice (FCJ) against either of the verdicts. The plaintiff has submitted an appeal against the refusal of leave to appeal to the FCJ.

In its judgments of 23 February 2016, the Federal Court of Justice (FCJ) rejected Mr Deisel’s appeal against the refusal of leave to appeal against the two verdicts of the Düsseldorf Higher Regional Court (HRC) on 6 November 2014 due to the absence of fundamental significance. As a result, the verdicts issued by the Düsseldorf HRC in favour of ALNO AG are legally binding in their entirety. ALNO AG has therefore invoiced Mr Deisel for a residu-al account receivable of € 0.4 million from a voluntary interim agreement dated June 2011, private use of a company car after dismissal without notice and for ac-crued interest.

Remuneration of former members of the Board of Management of ALNO AG and their surviving dependants

Emoluments paid to former members of the Board of Management of ALNO AG and their surviving depend-ants totalled € 432 thousand in the financial year (previ-ous year: € 535 thousand).

Furthermore, expenses for a subsequent redundancy payment in the amount of € 55 thousand for Mr Duffner arose in 2014.

Provisions for pension commitments for former members of the Board of Management and their surviving depend-ants totalled € 7,569 thousand in 2015 (previous year: € 10,360 thousand).

Provision for retirement benefits

There are no pension commitments or similar retirement benefit obligations for active members of the Board of Management in 2015.

K. COMPANIES utilising the exemption pursuant to Section 264

subsection 3 and Section 264 b of the German

Commercial Code (HGB)

The subsidiaries pino Küchen GmbH, Coswig (Anhalt), Zweitmarkenholding Impuls Pino GmbH, Pfullendorf, ALNO International GmbH, Pfullendorf, ALNO Logis-tik & Service GmbH, Pfullendorf, Gustav Wellmann GmbH & Co. KG, Enger, ALNO IP AG & Co. KG, Pfullendorf, and the property management company tielsa Küchen GmbH & Co. KG, Enger, have made use of the reliefs pur-suant to Section 264 subsection 3 and Section 264 b of the German Commercial Code (HGB). The consolidated financial statements and Group management report are published in the electronic Federal Gazette.


L. SHAREHOLDINGS

Name and head officeShare of

capital in % CurrencyEquity 1)

in thousands

Profit / loss for the year 1)

in thousands

Shares held in subsidiaries

Germany

pino Küchen GmbH, Coswig (Anhalt) 100 EUR 5,205 0 2)

Zweitmarkenholding Impuls Pino GmbH, Pfullendorf 100 EUR 25,667 0 2)

Gustav Wellmann GmbH & Co. KG, Enger 100 EUR −39,627 −12,089

Casawell Service GmbH, Enger 100 EUR 26 −2

ALNO Trading GmbH, Enger 100 EUR 39 0

Grundstücksverwaltungsgesellschaft tielsa Küchen GmbH & Co. KG, Enger 100 EUR 10 0 3)

ALNO International GmbH, Pfullendorf 100 EUR 20,903 0 2)

ALNO Logistik & Service GmbH, Pfullendorf 10) 100 EUR 593 0 2)

ALNO IP AG & Co. KG, Pfullendorf 100 EUR 56,861 861

ALNO Beteiligungs UG, Pfullendorf 100 EUR 1 0

Abroad

AFP Küchen AG, Arbon / Switzerland 100 CHF −7,712 2,705

ALNO (Schweiz) AG, Nidau / Switzerland 100 CHF 1,997 −1,263

ALNO U.K. Ltd., Leeds / UK 9) 100 GBP 8,510 1,754

ALNO Surfaces Ltd., Wolverhampton / UK 60 GBP 3 0

Stourbridge Kitchens Limited, Stourbridge / UK 8) 100 GBP −17 −17

Bradbury’s (Holdings) Limited, Exeter / UK 100 GBP 0 0

Bradbury’s of Exeter Limited, Exeter / UK 100 GBP 71 −3

Bradbury’s of Bristol Limited, Bristol / UK 100 GBP −172 −3

ALNO USA Corporation, New York / USA 100 USD −1,639 971

ALNO Manhattan LLC, New York / USA 4) 100 USD 0 0

Küchen Nordic AB, Stockholm / Sweden 61 SEK 47 −1,896

ALNO Middle East FZCO, Dubai / UAE 6), 7) 85 AED 1,543 −3,165

A’Flair Habitat, Haguenau / France 4) 100 EUR 52 27

Shares held in joint ventures

ALNO China Holding Limited, Hongkong / China 5) 45 EUR 270 −1,971

tielsa GmbH, Pfullendorf 45.5 EUR −1,781 −2,358

OOO Perwaja mebelnaja fabrika – ALNO, St. Petersburg / Russia 49 RUB 232,527 −14,626

1) Values for companies in Germany and companies in the UK according to national code. Values for other foreign companies according to IFRS code, unless indicated otherwise.

2) After transfer of profit or acceptance of loss based on the profit / loss transfer agreement with ALNO AG. 3) After distribution of profits to the investors. 4) Company is not included in the consolidated financial statements. 5) The figures are from the sub-group financial statements as at 31 December 2015. The company holds 100% of the shares in the as yet dormant companies

Wellmann China Company Ltd., British Virgin Islands, Impuls China Company Ltd., British Virgin Islands as well as Pino China Company Ltd., British Virgin Islands. 6) The figures are from the half-year financial statements as at 30 June 2014 7) Deconsolidated on 1 July 2014 8) Formerly ALNO Franchising Limited, Leeds / UK 9) Built-In Kitchen Ltd., Sevenoaks / UK and ALNO Contracts Ltd., Sevenoaks / UK were liquidated in 2015 and the assets and liabilities transferred to ALNO UK Ltd.,

Leeds / UK.10) Until 31 December 2015 operated under the company name logismo Möbellogistik Spedition GmbH, Pfullendorf


Furthermore, the ALNO Group includes the inactive com-panies Bruno Piatti AG, Arbon / Switzerland, ALNO USA Kitchen Cabinets Inc. New Castle, Delaware / USA, as well as the following companies that are in liquidation Wellmann Polska Sp.z o.o., Warsaw / Poland and Well-mann Asia Pte Ltd., Singapore, which are not included in the consolidated financial statements.

ALNO AG, Pfullendorf, is also the general partner of ALNO IP AG & Co. KG, Pfullendorf.

M. AUDITORS’ FEESThe following fees were expensed for the auditors of the consolidated financial statements:

The ALNO Group was audited by Pricewaterhouse-Coopers AG, Stuttgart.

The item Audit of financial statements encompasses fees for the statutory financial audit of the separate and con-solidated financial statements of ALNO AG as at 31 De-cember 2015.

The “Other services” comprised enforcement consulting services provided by PricewaterhouseCoopers AG, Stuttgart in 2014.

in € 000 2015 2014

Audit of financial statements 310 309

Other services 18 81

TOTAL 328 390

N. EVENTS AFTER THE BALANCE SHEET DATE

Extension of Max Müller’s contract

At its meeting on 22 March 2016, the Supervisory Board of ALNO AG decided to extend the contract with the Chairman of the Board of Management Max Müller pre-maturely until 31 December 2018.

Extraordinary dismissal legally binding

After a process lasting just under five years, ALNO AG can finally close the Deisel chapter. The Second Civil Chamber of the Federal Court of Justice (FCJ) in Karls-ruhe has rejected the two appeals against the refusal of leave to appeal by the former Chairman of the Board of Management. As a result, his extraordinary dismissal, which took place in April 2011, is legally binding.

The Düsseldorf Higher Regional Court (HRC) had already allowed the appeals by ALNO AG in their entirety in November 2014 and rejected the claims by the former CEO against his extraordinary dismissal in April 2011. The amount in dispute in the two proceedings came to approx. € 6.5 million. Had the dismissals been invalid, ALNO AG would have faced claims in the amount of up to € 7.5 million, which have consequently been finally averted.

Agreements with shareholders

On 31 July 2015, ALNO AG entered into a long-term mor-atorium agreement with Bauknecht Hausgeräte GmbH, Stuttgart, which lasts until 30 December 2016. The agree-ment replaced the moratorium agreement dated 10 De-cember 2014 which was limited to 31 March 2016. On 15 March 2016, a new moratorium agreement covering total receivables in the amount of € 41.0 million was con-cluded to formalise the verbal agreement reached in De-cember 2015, under which a partial amount of € 25.0 mil-lion will be repaid in stages from 29 September 2017 to 30 June 2018. The remaining € 16.0 million is due to be repaid in various tranches up to 31 December 2016.


For the loan, which the ALNO Group was granted by Bauknecht Hausgeräte GmbH, Stuttgart, in the amount of € 30.0 million in total on 11 April 2013, it was agreed by means of a supplement to the loan agreement of 26 February 2015 that a partial amount of € 10.0 million, which was due in September 2015, will not be due for repayment until July 2016. By means of a verbal agree-ment in December 2015, which was formalised in writing on 15 March 2016, the repayment of this partial amount of € 8.5 million would be extended by a further year until 31 July 2017, the remaining partial amount of € 1.5 million is due for repayment on 30 September 2016. The term of the remaining € 20 million remains unchanged.

On 16 January 2015, Bauknecht Hausgeräte GmbH, Stuttgart, granted ALNO AG a loan amounting to € 5.0 million until 10 March 2015. Repayment of the loan was extended by various supplementary agreements; the last time being the formalisation on 15 March 2016 of the verbal agreement reached in December 2015 to extend the loan until 31 July 2017.


Other financing activities

By means of a notarised property purchase agreement dated 3 February 2016, ALNO AG and an affiliated com-pany have sold part of their factory premises subject to the condition precedent of agreeing the final purchase price as part of a sale & lease back transaction. The final purchase price and the final rental terms will be negoti-ated in the second quarter of 2016. An advance payment of € 15.0 million secured by mortgages was made by the purchaser in February 2016.

In the event that ALNO AG cannot raise sufficient funding to cover its liquidity requirement, Comco Holding AG, Nidau, Switzerland, will grant ALNO AG a funding line in the period from March to May 2016 up to a maximum of € 11.0 million.

Development of sales and new orders January to February 2016

At € 66.8 million, the net sales of the ALNO Group were well up on the previous year’s figure (adjusted for the sale of Impuls) (€ 62.2 million) and above budget in the first two months of 2016. The current orders received in the ALNO Group were also well up on the previous year and are continuing their steep upward trend. On this basis, the Board of Management confidently expects that the planned sales and revenue targets for the 2016 business year will be achieved.

Going concern / risks threatening the existence of the Group

The company strategy of ALNO AG is focused on the globalisation of its markets, making production in Ger-many more flexible, centralising administrative units and optimising the brand and product portfolio. Operation-ally-speaking, this will lead to a sustained improvement in the organisation and more efficient market develop-ment. Substantial investment in IT, machinery, marketing and market expansion is required for this purpose and is planned. Implementation of the company’s strategy is dependent on implementation of the planned financing measures and the prompt receipt of funds.

ALNO AG is also planning a financial or capital measure for the second quarter of 2016, which will lead to a cash inflow of some € 40 million.



The ALNO Group as a going concern is dependent on the planned financial and capital measures amounting to being made available in full and on schedule, as well as continuation of a stringent liquidity management pol-icy. If necessary, investments will have to be postponed or reduced. Furthermore, the assumptions in the cor-porate planning, especially with regard to profit / loss and liquidity targets, will have to be accurate as planned.

O. DECLARATION OF COMPLIANCE PUR-SUANT TO SECTION 161 OF THE STOCK CORPORATION ACT (AKTG)

The declaration of compliance with the recommenda-tions of the “Government Commission on the German Corporate Governance Code” and Section 161 of the Stock Corporation Act (AktG) was reviewed and re- issued by the Board of Management and Supervisory Board on 1 October 2015. The declaration is permanent-ly accessible to shareholders on the company’s website and reprinted in the single-entity and group management report of ALNO AG for the financial year 2015.

In accordance with Section 3.10 of the German Cor-porate Governance Code, the Board of Management and Supervisory Board of ALNO AG report on the ALNO Group’s corporate governance in the annual report for the financial year ending 31 December 2015. Information on the basic principles of the system of remuneration for the Board of Management can be found in Section J. “Supervisory Board and Board of Management”.

P. EARNINGS PER SHARE

The earnings per share are obtained by dividing the net consolidated income accruing to the shareholders by a weighted number of issued shares. There was no diluting effect due to so-called potential shares in either the year under review or the previous year.

Group profit for the period


ALNO Aktiengesellschaft




in € 000 2015 2014

Group profit for the period −4,386 −4,121

Attributable to shareholders of ALNO AG −4,294 −3,988

Minority shares −92 −133

Number of shares in thd. (weighted average) 73,832 70,095

EARNINGS PER SHARE IN € −0.06 −0.06


We have audited the consolidated financial statements prepared by the ALNO Aktiengesellschaft, Pfullendorf, comprising the consolidated balance sheet, the consol-idated income statement, the statement of comprehen-sive income, statement of changes in equity, cash flow statement and the notes to the consolidated financial statements, together with the combined management report for the business year from January 1 to Decem-ber 31, 2015. The preparation of the consolidated finan-cial statements and the combined management report in accordance with the IFRSs, as adopted by the EU, and / or the additional requirements of German commer-cial law pursuant to § (Article) 315a Abs. (paragraph) 1 HGB (“Handelsgesetzbuch”: German Commercial Code) is the responsibility of the parent Company’s Board of Managing Directors. Our responsibility is to express an opinion on the consolidated financial statements and on the combined management report based on our audit.

We conducted our audit of the consolidated financial statements in accordance with § 317 HGB and German generally accepted standards for the audit of financial statements promulgated by the Institut der Wirtschafts-prüfer (Institute of Public Auditors in Germany) (IDW). Those standards require that we plan and perform the audit such that misstatements materially affecting the presentation of the net assets, financial position and results of operations in the consolidated financial state-ments in accordance with the applicable financial report-ing framework and in the combined management report are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the Group and expectations as to possi-ble misstatements are taken into account in the deter-mination of audit procedures. The effectiveness of the accounting-related internal control system and the evi-dence supporting the disclosures in the consolidated financial statements and the combined management report are examined primarily on a test basis within the framework of the audit. The audit includes assessing the annual financial statements of those entities included in consolidation, the determination of the entities to be in-cluded in consolidation, the accounting and consolida-tion principles used and significant estimates made by the Company’s Board of Managing Directors, as well as evaluating the overall presentation of the consolidated financial statements and the combined management report. We believe that our audit provides a reasonable basis for our opinion.

Our audit has not led to any reservations.

In our opinion based on the findings of our audit the consolidated financial statements comply with the IFRSs as adopted by the EU and the additional requirements of German commercial law pursuant to § 315a Abs. 1 HGB and give a true and fair view of the net assets, financial position and results of operations of the Group in accordance with these requirements. The combined management report is consistent with the consolidated financial statements and as a whole provides a suitable view of the Group’s position and suitably presents the opportunities and risks of future development.

Without qualifying our opinion, in accordance with our professional obligations, we refer to the fact that the com-pany’s ability to continue as a going concern is threat-ened by risks which are described in the sections entitled 3 “Report on events subsequent to the reporting date” and 4 “Risk report” contained in the combined manage-ment report. There is stated that the continued existence of the ALNO group depends on the timely realization of planned corporate actions. This includes especially cash generation amounting to about € 40 million resulting from a specific corporate action mentioned in the combined management report in the second quarter of 2016 and an eight-figure cash inflow resulting from the sale of real estate. In the event of a possible shortfall in liquidity, Comco Holding AG, Nidau, Switzerland, is obliged to grant liquidity up to an amount of € 11 million in form of a bridge loan. Furthermore, a stringent liquidity manage-ment has to be conducted and capital expenditures have to be delayed or reduced. Moreover the assumptions – especially regarding budgeted sales and results as well as liquidity – underlying the budget need to be fulfilled.

Stuttgart, March 31, 2016

PricewaterhouseCoopersAktiengesellschaftWirtschaftsprüfungsgesellschaft

Klaus Neubarth ppa. Axel OstWirtschaftsprüfer Wirtschaftsprüfer(German Public Auditor) (German Public Auditor)

AUDITOR’S REPORT


IN COMPLIANCE WITH SECTION 297 SUBSECTION 2, SENTENCE 4 OF THE GERMAN COMMERCIAL CODE (HGB), CONCERNING THE CONSOLIDATED FINANCIAL STATEMENTS AND SINGLE-ENTITY AND GROUP MAN-AGEMENT REPORT FOR THE FINANCIAL YEAR 2015:

“We confirm that, to the best of our knowledge and on the basis of the accounting standards to be applied, the consolidated financial statements convey a true and fair picture of the Group’s net assets, financial position and results of operations, and that the Group management report presents the development of business and the Group’s position in such a way as to convey a true and fair picture of actual conditions, and that it sets out the essential opportunities and risks associated with the Group’s probable development.”






DECLARATION BY THE STATUTORY REPRESENTATIVES OF ALNO AG


Date Event

17 May 2016 Interim report on the 1st quarter 2016

02 June 2016 Annual general meeting 2016

22 August 2016 Half-yearly financial report 2016

31 October 2016 Interim report on the 3rd quarter 2016

FINANCIAL CALENDAR 2016

PUBLICATION DATA

PublisherALNO Aktiengesellschaft88630 Pfullendorf, GermanyTelephone +49 7552 21-0Fax +49 7552 21-3789E-mail [email protected]

EditorsNewMark Finanzkommunikation GmbH Torsten GrafTelephone +49 69 94 41 80 64E-Mail [email protected]

Concept / Design / TypesettingIR-One AG & Co., Hamburgwww.ir-1.com

Legal noteThis annual report contains forward-looking statements. Forward-looking statements are not based on historical events and facts. These statements are based on assumptions, forecasts and estimates of future developments by the Board of Management. The assumptions, forecasts and estimates concerned are based on all the information currently available. However, the actual results may deviate from those presently expected if the assumed future developments underlying the statements and estimates do not materialize. Neither the Board of Management nor the company can warrant that the forward-looking statements will actually materialize. Both the Board of Management and the company are under no obligation, above and beyond their statutory obligations, to update any statements or to bring them into line with future events and developments. Neither in the Federal Republic of Germany nor in any other country does this annual report and the information contained in it constitute either an offer to sell or a request to buy or subscribe to secur-ities held or issued by ALNO AG. In the United States of America, shares in ALNO AG may only be sold or offered after prior registration or, without such prior registration, on the basis of an exception to the registration requirement pursuant to the provisions of the US Securities Act of 1933 as most recently amended. ALNO AG does not intend to realize a public offering of shares in the United States. The annual report of ALNO AG is published in German and English. If there are any discrepancies, the German version shall take precedence.



88630 Pfullendorf, Germany

Telephone +49 7552 21-0

Fax +49 7552 21-3789

E-mail [email protected]

www.alno.de

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